If we have consulted the conditions of several mortgages for second homes to finance the purchase of an apartment on the beach, we will surely have noticed some differences with respect to those for habitual residence. For example, that its amount is less or that its term is shorter. In this article we analyze why this happens and we will see how one of these loans must be in order to consider it attractive.
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Giving a loan from your second residence is more risky
The main reason why banks worsen the conditions of these products is that they take more risk . And it is that it is not the same to give a loan for a second residence than to grant one to finance the home in which we usually reside, because if we go through economic problems, it is more likely that we will stop paying the first loan than the second.
To cover this risk, the entities are stricter when granting these PHH mortgages and, in certain cases, even worsen their price. Let’s see what that translates to:
- They cover a lower amount of the purchase : instead of the usual 80%, these products usually finance a maximum of between 60% and 75% of the value of the home.
- Their term is usually shorter : in general, banks will give us up to 20 or 25 years at most to pay them back.
- They may have a higher interest in some cases : although it does not always happen, there are entities that apply a higher rate if the mortgage is requested to buy a residence for vacation use.
Likewise, they can demand stricter requirements to obtain the money , especially if we already have another mortgage loan in force on our habitual residence. In these cases, they will ask us to have a good profile and they could even ask us to provide additional guarantees (other properties, guarantees, etc.).
What are the best mortgages for a second home?
But just because their conditions are tougher does not mean that we cannot finance our vacation residence at a good price. If we look carefully, within the market we will find mortgages with a variable interest below Euribor plus 1% or with a fixed rate of less than 2% for 20 years. All this with little or no commission and without having to contract many combined products .
A good example of this is Coinc , an online bank that finances up to 60% of a second residence with a term of up to 30 years . These are the conditions offered both at a fixed rate and at a variable rate:
Both loans are for one or two holders. Recruitment is completely online, which will save us visits to offices and paperwork. In order to request these mortgages, yes, it is necessary to contract the entity’s savings account, which has no commissions.
Don’t know what mortgage to ask for? In the following free guide we explain how to compare several of these products. In addition, in it you will find what steps you must take to get the best financing