The loan guide: Loans for your holiday home
Do you dream of a cottage but have doubts about how it should be funded and what you can afford? The joy of buying the dream home can quickly go away if you are too expensive. It is therefore important to think about what you can afford and whether the house is for private use or rent. Read below, where we give you an overview of your loan options for the cottage.
The financing of a cottage differs slightly from the financing of ordinary owner-occupied housing.
- Mortgages or home loans up to 60% of the purchase price. In the case of cottages / holiday homes, up to 60% of the purchase price can be borrowed through mortgages or home loans. The money is borrowed through bond investors who get collateral in your home. You are thus guaranteed a cheap financing of the cottage with a long term of up to 30 years.
- Bank loans of up to 35% of the value of the home. This loan usually has a higher interest rate and shorter maturity than mortgage and is therefore important to get repaid first.
- Own payout. From November 1, 2015, a new Executive Order on good practice for financial companies came into force, which means that, as a rule, buyers themselves must finance 5% of the purchase price in payment. However, first-time buyers with a good fixed income are exempt if the available amount is significantly above the minimum requirement. Therefore, make sure you get a savings and you are also covered if unforeseen expenses should arise.
- Additional loans for the cottage. Do you have any value in your house? Then you can get an additional loan for the purchase of a holiday home, thus avoiding the standard rules for financing holiday homes. The free value is the present value of the dwelling less the debt in the dwelling. For example, if you owe $ 500,000 in a home which is currently worth 1.5 million, you have a free value of $ 1 million. This free value can then be borrowed with a cheap mortgage.
- It may be a good idea to consider an extra time if the cottage is to be rented out during periods when you do not want to use it yourself. This way you get some extra money in your pocket. At the same time, you only have to pay tax on part of the income as you are entitled to a deduction. You can read more about this at Stratlines.