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Can I buy a holiday home if I’m still paying off my mortgage?

With summer on our doorsteps, many of us start to dream of the idea of owning a holiday home to escape to with the family. But questions arise when we're already juggling the responsibilities of a current mortgage. Is it possible to make that bach a reality while still on the path to paying off your home? Let’s find out!

A Balancing Act
While having an existing mortgage isn't a roadblock, it's crucial to consider your current financial situation. Evaluate your income, expenses, and outstanding mortgage balance. A comfortable debt-to-income ratio ensures you can comfortably manage both mortgages.

Your Home's Hidden Treasure
If you've been diligently paying your mortgage, you've been building equity. This is essentially the difference between your home's market value and the remaining mortgage balance. Leveraging this equity can open doors to financing options for your dream holiday home.

Explore Your Options
New Zealand offers a variety of mortgage products, each tailored to suit different financial situations. You can speak to a mortgage advisor like myself about options, including a second mortgage, home equity loan, or refinancing. These tools can help you manage both your current home and your holiday getaway.

Covering Costs
Consider the potential rental income your holiday home could generate when you're not using it. This additional revenue stream can offset expenses, making the prospect of a second mortgage more manageable.

Tax Implications
New Zealand's tax laws are intricate, and owning a second property may bring about various tax considerations. Consulting with a tax professional can provide valuable insights into how to optimise your financial situation.

A Holistic View
Look beyond the initial purchase. Consider maintenance costs, property management, and potential fluctuations in the property market. A well-thought-out plan ensures you're making a sound investment for the future.

Expert Guidance
If you’re considering the purchase of a holiday home, drop me a line, and we can look at your unique circumstances to help you decide if it’s a viable option. Then, I can help guide you through the process to make it happen - so let’s chat!


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