Is borrowing against your city home the easiest way to finance a cottage purchase?
No—everyone knows that a lottery win is the easiest way to finance a cottage. But if your numbers haven’t come up yet, a home equity loan may be your next best option, says Christine Martysiewicz of Re/Max Ontario-Atlantic Canada, because your interest rate and terms will be tied to the value of your city property rather than to your cottage.
Prefer not to tap into your home’s equity? Most financial institutions require the buyers of seasonal properties to come up with at least a 25 per cent down payment, and will charge a higher interest rate on the up to 75 per cent borrowed balance than on a regular homeowner’s mortgage. Year-round properties, however, will generally qualify for standard mortgages.
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