Second homes typically require 10 to 25 percent down, depending on the loan type and lender — higher than primary residence minimums.

A second home sits between a primary residence and an investment property in the lender's view, which is why the down payment floor is steeper. Conventional loans for second homes usually start at 10 percent, but many lenders push toward 15 or 20 percent. FHA loans, which allow 3.5 percent down on a primary home, do not cover second homes at all. VA loans also exclude second homes. If you are putting down less than 20 percent on a conventional loan, you will pay private mortgage insurance (PMI), which adds to your monthly cost.

The exact percentage depends on three things: the lender's own rules, your credit score, and the property type. A lender with stricter second-home guidelines might require 25 percent down where another asks for 15. Your credit score matters — a score above 740 usually opens lower down payment options than a score in the 620 range. And a vacation cabin in a resort area may carry different requirements than a rental property in a stable neighborhood.

Key Takeaways

  • Conventional loans for second homes typically require 10 to 25 percent down, with 15 to 20 percent being most common.
  • Private mortgage insurance (PMI) applies to any conventional second-home loan with less than 20 percent down, raising your monthly payment.
  • Your credit score and the lender's specific second-home policy affect the minimum down payment you will encounter.
  • FHA and VA loans do not cover second homes, so you must use a conventional loan or portfolio lender.
  • Some lenders offer portfolio loans (held in-house rather than sold) with different down payment rules — worth asking about if you do not meet conventional minimums.

Why second homes cost more to finance than primary residences

Lenders treat a second home as higher risk than a primary residence because you live there part-time or seasonally. If money gets tight, you are more likely to stop paying the second-home mortgage and keep paying the primary one. That logic drives the higher down payment requirement — it gives the lender more cushion if they have to foreclose and sell the property in a down market.

The property itself also matters. A second home in a seasonal market (a ski town, a beach community) may be harder to sell quickly than a year-round neighborhood, so lenders ask for more skin in the game. A rental second home — where you rent it out part of the year — gets treated differently again, sometimes with even stricter requirements because it is now an investment property.

How down payment changes with loan type and lender

Conventional loans are the most common path for second homes. Most lenders require 10 to 20 percent down, though some will go as low as 10 percent for borrowers with strong credit and income. A few lenders specialize in second homes and may offer 10 percent down with a credit score above 700. If you put down less than 20 percent, PMI kicks in — typically 0.5 to 1.5 percent of the loan amount per year, added to your monthly payment.

Portfolio lenders — banks that keep mortgages on their own books rather than selling them — sometimes have different rules. They may accept 10 percent down on a second home when conventional lenders want 20, or they may have looser income requirements. These lenders are less common and often require a relationship with the bank (a checking account, other loans), but they are worth calling if you do not meet conventional minimums.

Jumbo loans (for properties above the conventional loan limit, which varies by county but is often around $766,000) usually require 20 to 25 percent down for a second home. Some jumbo lenders will go to 15 percent for very strong borrowers, but this is the exception.

What lenders look at beyond the down payment percentage

Your credit score affects not just whether you can borrow, but how much you have to put down. A score above 740 opens the lowest down payment options — sometimes 10 percent on a conventional loan. A score between 680 and 740 typically requires 15 to 20 percent. Below 680, many lenders will not touch a second home, or will demand 25 percent down.

Debt-to-income ratio matters more for a second home than a primary residence. Lenders want to see that your total monthly debt payments (including the new second-home mortgage) do not exceed 43 to 50 percent of your gross monthly income. A second home mortgage counts in full, even if you plan to rent it out — lenders do not assume rental income will cover the payment. This means you need stronger income to may have access to for a second home than you might expect.

The property itself gets scrutinized. Lenders order an appraisal and a title search. If the property is in a flood zone, in a resort area with seasonal vacancy, or in a market with declining values, the lender may ask for a larger down payment as compensation for the risk.

The cost of putting down less than 20 percent

If you put down 15 percent instead of 20 percent, you will pay PMI. On a $400,000 second home with 15 percent down ($60,000), your loan is $340,000. PMI might run $170 to $340 per month, depending on the lender and your credit score. That adds $2,040 to $4,080 per year to your housing cost.

PMI stays on the loan until you reach 20 percent equity — either by paying down the principal or by the property appreciating. On a 30-year mortgage, that can take 8 to 12 years if you are only making regular payments. You can pay it off faster by making extra principal payments or by refinancing once you have built enough equity.

Some lenders offer lender-paid mortgage insurance (LPMI) instead, where the lender covers the PMI cost but charges you a higher interest rate. This can be cheaper if you plan to sell or refinance within 5 to 7 years, but more expensive if you keep the loan long-term.

Second homes you plan to rent out have stricter rules

If you intend to rent out the second home for part of the year, lenders classify it as an investment property, not a second home. Investment properties typically require 20 to 25 percent down, and sometimes 30 percent. The lender will ask for a lease or rental agreement, proof of rental income from similar properties, or a rental projection from a property manager.

Lenders also cap the number of investment properties you can own while borrowing — usually two to four total, depending on the lender. If you already own one rental property and want to buy a second, you may hit that limit and have to use a portfolio lender or a specialized investment-property lender.

Frequently Asked Questions

Can I put down 5 percent on a second home like I can on a primary residence?

No. FHA loans, which allow 3.5 percent down on primary homes, do not cover second homes. Conventional loans for second homes start at 10 percent minimum, and most lenders require 15 to 20 percent. Some portfolio lenders may go lower, but 5 percent is not realistic for a second home.

Does the down payment change if the second home is in a different state?

Not directly, but the property location affects the lender's risk assessment. A second home in a stable market may may have access to for a lower down payment than one in a seasonal resort area or a declining market. Ask the lender whether the location changes their requirements.

What if I have a low credit score but a large down payment?

A larger down payment can offset a lower credit score, but only to a point. Most lenders have a credit score floor — often 620 to 640 — below which they will not lend at all, regardless of down payment. If your score is above that floor, a 25 percent down payment may open options that 15 percent would not.

Can I use a home equity line of credit to fund the down payment?

Yes, but the lender will count the HELOC payment as debt when calculating your debt-to-income ratio. If your primary home has a $300 monthly HELOC payment and the second home will have a $2,000 mortgage payment, the lender sees $2,300 in housing debt. This can push you over the 43 to 50 percent threshold and reduce how much you can borrow.

What happens to my down payment if the second home appraises lower than the purchase price?

You still owe the full purchase price. If you agreed to pay $500,000 and it appraises at $450,000, the lender will only lend 80 percent of the appraised value (if you put 20 percent down). You would need to bring an extra $40,000 to closing to make up the difference, or renegotiate the purchase price with the seller.