Is it possible to buy a vacation home with a second mortgage from the bank?

Second home mortgage: What are the conditions for financing the purchase of a second home?

Having a second home is the dream of many families - whether for vacations, renting, or as a long-term investment. But is it possible to apply for a second mortgage? And what do you need to know before moving forward?

Yes, it is possible to have two mortgage loans.

Nothing prevents from having more than one housing credit simultaneously. As long as you have the financial capacity to assume the expenses, banks can approve a second loan for the purchase of a new house.

However, the risk analysis will be more demanding, since there is already a fixed monthly obligation with the first credit.

In what situations does it make sense?

A second mortgage can be used for:

• Buy a vacation home.

• Investing in a property for renting;  

• Acquiring a property for a child, keeping the property in your name.

• Buy a new house while keeping the current one.  

What will the bank analyze?

When applying for a second credit, the banks will carefully evaluate: 

• Your effort rate: Sum of loan installments divided by monthly income. Ideally, it should be below 35%-40%;

• Your financial and professional stability;

• The credit history (no defaults);  

• The value of the property and the down payment;  

• The Loan-to-Value ratio (LTV) - generally, you will have to make an initial payment of more than 10%-20%, since it is a non-permanent residence.

Interest rates and conditions.

The second credit will have different conditions from the first:  

• Payment deadline can be shorter & nbsp;

• Spread may be higher;

• The financed amount tends to be lower (maximum 80% of the purchase or appraisal value).

• The required insurance are the same, the multi-risk and life insurance.

Having two houses can be an achievable goal - as long as it is planned responsibly.

Read also: Second home credit: How does it work?

Before moving forward with a second home loan, simulate various scenarios with different banks. To do so, the credit intermediaries from Poupança no Minuto can help assess your financial capacity, collect proposals, and assist in choosing the most suitable one for you! They handle the entire process for you, at no cost. Make your simulation now!