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Vacation Property & Second Home Mortgage Financing

Can I Get a Mortgage When Buying a Second Home?

Second Home Mortgage | Vacation Mortgage | 2nd Home MortgageOwning a second home or vacation property makes sense on a lot of different levels. It can dramatically reduce the cost of vacations, bring your family closer together, be a good investment, and in some cases even generate rental income. With the Canadian Mortgage & Housing Corporation (CMHC) recently revising their vacation property and second home mortgage loan insurance products, it is now easier than ever to finance second homes in Canada.

Vacation Property & Second Home Mortgage CMHC Insurance Features

  • Available for one unit owner occupied properties located anywhere in Canada
  • Access to all CMHC owner-occupied mortgage loan insurance products
  • An individual can be a borrower/co-borrower on a maximum of two owner occupied properties that secure CMHC-insured financing
  • No additional underwriting requirements or premium surcharges for a second home – standard product specific premiums apply
  • Flexible financing options – single advance progress advances and extended amortization periods are available
  • CMHC offers 2nd home mortgage loan insurance premium refunds for homeowners who purchase an energy-efficient home or purchase and make energy-saving renovations to an existing home. See CMHC Green Home for more information.

CMHC Vacation Property & Second Home Mortgage Product Highlights:

Loan Purpose
  • Purchase (with traditional or non-traditional sources of down payment)
  • New Construction
  • Refinance
  • Purchase or Refinance with Improvements
  • Single and Progress Advances
Loan-to-Value (LTV) Ratio Maximum LTV varies by CMHC product
Maximum Amortization LTV > 80%: 25 years, LTV ≤ 80%: 40 years
Occupancy At initiation, the property that secures a CMHC-insured 2nd home mortgage loan must be intended for occupancy at some point during the year by a borrower; or a relative ofthe borrower on a rent-free basis. Lenders must confirm owner occupancy and maintain the confirmation on file.
Number of Units One Unit
Maximum Number of CMHC-Insured Second Home Mortgages for Owner-Properties An individual can be a borrower/co-borrower on a maximum of two owner occupied properties that secure CMHC-insured financing.
Borrower Eligibility Permanent Residents including newcomers to Canada.
General Property Requirements
  • The property can be located anywhere in Canada and must be suitable for, and available for, year-round occupancy.
  • Properties that are constructed for seasonal use, or have seasonal access, are not eligible.
  • Properties located on an island must have year-round bridge or ferry access.
  • Time-share interests, life leases and properties in rental pools are not eligible.
General Guideline for History of Managing Credit Debt service guidelines vary by CMHC product.


Owner-Occupied Vacation Property & Second Home Mortgage CMHC Premiums

Loan to Value (LTV) Ratio Premium on Total Loan Amount Premium on Increase to Loan Amount for Refinance
Up to and including 65% 0.50% 0.50%
Up to and including 75% 0.65% 2.25%
Up to and including 80% 1.00% 2.75%
Up to and including 85% 1.75% 3.50%
Up to and including 90% 2.00% N/A
Up to and including 95%
Traditional Down Payment*
2.75% N/A
Up to and including 95%
Non-Traditional Down Payment**
2.90% N/A


CMHC Surcharges for Extended and Blended Amortization

Extended Amortization
Add 0.20% for every 5 years of amortization beyond the 25 year mortgage amortization period. Note: After July 9th, 2012, LTV greater than 80% will not be insured for greater than 25 year mortgage amortization.

Blended Amortization
Add 0.50% for a Blended Amortization for Refinance.

*Traditional sources of down payment include: Applicant’s savings, RRSP withdrawal, funds borrowed against proven assets, sweat equity (< 50%of minimum required equity), land unencumbered, proceeds from sale of another property, non-repayable gift from immediate relative, equitygrant (non-repayable grant from federal, provincial or municipal agency).  
** Non-traditional sources of down payment include: Any source that is arm’s length to and not tied to the purchase or sale of the propertysuch as borrowed funds, gifts, 100% sweat equity and lender cash back incentives.

Finding out which solution will work best for you is as easy as contacting us about buying a second home and arranging a second home mortgage. We will help you find the financing that best suits your vacation property mortgage needs!

Please note, all information provided on this page are provided by Home Mortgage Ontario, but should be confirmed by visiting the Canada Mortgage and Housing Corporation (CMHC) website.

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