Welcome to our Can I Afford a Vacation Home Calculator.
- First, complete the inputs below in Step 1 to determine your monthly amount available for a vacation home mortgage using your monthly income less monthly debts. If you see a negative number, it’s likely that you cannot afford a vacation home mortgage unless you manage to reduce your debt or increase your income. If you see a positive number, this is roughly the amount available to you in order to service a vacation home mortgage.
- Second, complete the vacation home mortgage inputs in Step 2 to determine the maximum amount of vacation home you can afford.
For explanatory notes on certain calculations, hover over the relevant result for more information.
Can I Afford a Vacation Home Calculator
Complete the following:
Vacation Home Mortgage Guidelines
Keep these guidelines in mind:
- Debt to income ratio. For the purposes of the above calculation, we have assumed a maximum 43% debt to income ratio overall, although most lenders will typically want to see a ratio of 36% or less.
- General mortgage terms. Mortgages for vacation homes are typically accompanied by larger down payment requirements, higher interest rates and more conservative lending guidelines. For example, many lenders in the United States and Canada will require a down payment of at least 20% for a vacation home.
- Rental income. You may be able to increase your borrowing capacity through rental income. Depending upon the lender, they may give you credit for up to 70% of the projected fair market rents in Canada and 75% in the United States.
- Home equity. If you have equity built up in your primary residence, you may be able to borrow against the value of your home. Depending upon the lender, you may be able to borrow up to 80% of such value if you have no existing mortgage on the property. This will be especially helpful for coming up with the down payment.
Still, be sure to peak to your bank, or mortgage broker, to determine their lending criteria. For more information on lending guidelines, interest rates and down payment requirements for a vacation home, explore the following: