Borrowing for the second home
Borrowing and/or your own money?
In the short term is a second property as an investment not very lucrative. However, as a long term investment it can have some interesting results. You can rent it out, enjoy it yourself, and if the value of the land increases it also offers interesting opportunities.
Using excess value
An interesting way to finance your second property is to use the equity from your first home and then increase your current mortgage. You will need hard cash, as a second home will not be 100% financed.
There is own money for a second home is not 100% funded for the full. Think of a 25% investment. Use your retirement.
Closing a mortgage or second mortgage?
Another possibility is to close your current mortgage. The old mortgage is paid off and a new one is started. It may be that you have to pay extra interest because you are stopping your current mortgage, but you can get more information about this from your bank. Financing a second property.
If this is not possible, then it might be possible to obtain a second mortgage for your second property. Your current home will then become the collateral for your new mortgage. From the financial part you used for the second property the mortgage interest is not deductible.
Read about 6 steps to buying your second home