1. Know the Type of Vacation Property You Want — Lenders Care
Not all vacation homes are treated the same by lenders. Before you shop, get clear on how you plan to use the property:
Type A: True Vacation Homes (Most Common)
These are properties used by you and your family for recreation, not rented out nightly or monthly.
Typically must be:
- Year-round accessible
- At least 3-season usable
- Equipped with permanent heat and foundation
- Not on leased land or highly remote
Financing perks:
These often qualify for similar rates and terms as a primary residence.
Type B: Recreational Properties With Limitations
These might be:
- Seasonal cabins
- Remote locations
- Properties without full utilities
- Properties with lake access but not road access
Financing impact:
Expect higher down payments, stricter lender requirements, or limited lender options. Some may require 20–35% down.
2. Short-Term Rental Properties (Airbnb/VRBO)
If you intend to rent your property nightly, this becomes an investment property, not a vacation home—and banks underwrite it differently.Down Payment Requirements
For a true vacation home:
- Minimum 5% down for purchases up to $500,000
- 10% down for the portion between $500,000–$1,000,000
- 20%+ down once the property exceeds $1M or does not meet lender criteria
For rental-use or investment vacation homes:
- 20%–30% down is standard.
3. Understand the Impact of a Second Mortgage
Owning a second home means carrying a second mortgage payment—whether or not you occupy the property regularly.
If your debt ratios are tight, a co-signer, restructuring your primary mortgage, or consolidating debts may help.
4. Rental Income: Can It Help You Qualify?
Long-term rentals: Some lenders will allow 100% of rental income or apply an offset to help qualify.
Short-term rentals: Most lenders will not use projected Airbnb income for qualifying on a purchase. Some may consider historical income once you’ve operated long enough to produce tax returns.
If generating revenue is part of your plan, speak to a mortgage advisor early to structure the purchase correctly.
5. Property Taxes, Strata Fees & Insurance
When budgeting, remember that a vacation home can carry additional costs.
Your mortgage professional can help you build a full cost picture so there are no surprises at closing.
6. What to Expect for Mortgage Rates
Rates for second homes are typically similar to primary residences—unless the property falls into the “limited-use” or “rental-investment” category.
Shopping your mortgage through a broker can give you access to lenders that specialize in recreational properties.
7. Consider Future Resale Value & Growth
The Okanagan market has shown strong long-term appreciation.
But smaller lakes and rural locations can vary widely in liquidity. Always buy with both personal enjoyment and long-term marketability in mind.
8. Work With a Local Team
Vacation properties often come with unique challenges—from zoning and water access to well systems, septic, and strata bylaws.
Final Thoughts
Buying a vacation home in the Okanagan is an exciting opportunity—whether it’s for lake weekends, wine tourism, ski getaways, or just a peaceful retreat. With the right financing strategy, you can protect your cash flow, qualify comfortably, and position yourself for long-term financial success.
If you’re considering purchasing a vacation home and want clarity on what you can afford, how much down payment you’ll need, or which lenders will finance your specific type of property, I’m happy to help you map out the best strategy.
By Annette Perry | AIA