Purchasing a Cottage or Second Home

Unlocking the Charm of Your Cottage or Second Home

Considering a vacation home, cottage, or city condo as your second haven? Leverage the equity in your existing property for a down payment or even full financing. A minimum 5% down payment is required for secondary homes, with potential variations based on the property type.

Before diving into your second property journey, consult with your mortgage agent/broker, financial planner, and realtor. Together, they’ll help define your budget, discuss tax implications, and guide you toward the perfect property.

For a summer cottage, down payment requirements hinge on property type—5% for Type A Criteria and 10% for Type B. Navigate Mortgage Default Insurance considerations with our expertise, offering down payment options ranging from 20% to 50% based on property criteria.

Year-round second homes typically require a 5% down payment, while country dwellers eyeing a town condo can also enjoy a 5% down payment option.

Crafting a comprehensive budget for your second home involves considering insurance, property taxes, utilities (3 or 4 seasons?), maintenance, mortgage costs, and entertainment expenses (TV, internet, phone, etc.). Let APS Mortgages guide you to an affordable retreat!

Secondary Homes – Type A

  1. Foundation Requirements:
    A permanent foundation installed beyond the frost line, certified by a professional engineer.
    Acceptable foundations include concrete/concrete block, preserved wood, or post/pier on solid bedrock.
  2. Zoning and Usage:
    Must be zoned and used as residential, rural, or seasonal.
    Mixed-use or rental pooling arrangements are not accepted.
  3. Title Conditions:
    Acceptable titles include freehold or condominium. Co-ops or ¼ interest ownerships are not accepted.
  4. Property Composition:
    Minimum requirements: a kitchen, 3-piece bathroom, bedroom, and a common area.
  5. Economic Life:
    The remaining economic life must be at least 25 years.
  6. Road Access:
    Year-round access on reasonably maintained public roads serviced by the local municipality.
    Privately serviced roads are allowed with a maintenance contract in place.
  7. Winterization and Heating:
    Property must be winterized with a permanent heat source.
    Acceptable heating methods include baseboard, forced air, water radiator, radiant, coal, propane, geothermal heat pumps, or heat pumps.
  8. Construction Quality:
    Good quality construction with no signs of deferred maintenance.
  9. Water Source:
    Acceptable water sources include well, municipal service, or cistern.
    Water must be drinkable; lake or river water is accepted with a property-specific filtration system (e.g., reverse osmosis).
  10. Market Appeal and Surroundings:
    Must exhibit good market appeal in the area.
    No adverse influences or neighborhood nuisances should be present.

Secondary Homes – Type B

While Type B properties share similarities with Type A, the following exceptions apply:

  1. Heat Source:
    A permanent heat source is not mandatory. Acceptable alternatives include a wood stove, fireplace, stove, or heat blower.
  2. Foundation:
    The foundation may be floating, such as sitting on blocks.
  3. Road Access:
    Seasonal road use is acceptable. Winter plowing is not obligatory.
  4. Water Source:
    Water need not be drinkable, but there must be running water in the home.
  5. Access Method:
    Boat access only is accepted for Type B properties.

Get In Touch

1330 Mid-Way Boulevard, Unit #1
Mississauga, ON L5T 2K3 Canada

(647) 525-4005

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Mon: 9:00 AM – 6:00 PM
Tue: 9:00 AM – 6:00 PM
Wed: 9:00 AM – 6:00 PM
Thu: 9:00 AM – 6:00 PM
Fri: 9:00 AM – 5:00 PM
Sat: Closed
Sun: Closed

Mortgage Alliance - LIC # 10530