Buying a holiday home is a dream for many, a mortgage or other form of financing can make this dream a reality. Financing a holiday home can fortunately be done in several ways. We give an overview of the four most commonly used.

Financing holiday home from your own funds

If you have savings or a stock portfolio, there is an option to finance the holiday home with your own funds. Today, savings rates are low so investing your savings in holiday home is a smart solution. The big advantage of financing with your own funds is that you don’t have to take out a loan and therefore pay no interest.

Financing your holiday home with a mortgage

If you do not have sufficient equity, the bank can help with a holiday home mortgage. However, there is a difference between a mortgage on your first and second home. In the latter case, you are not eligible for mortgage interest deduction.

This can make a big difference but fortunately, interest rates are low. Still, there are some drawbacks to a mortgage on a second home. For example, sometimes the bank charges an interest surcharge and often the second home is not fully financed. It’s best to assume 60-70%. For example, if you want to buy a house in Spain or another country, not all banks will cooperate either.

Finance your holiday home with a personal loan

If you want to buy a holiday home or chalet, you can also choose to take out a personal loan, where you receive the full amount from the bank in one go. Each month you repay the loan with a fixed amount. The downside: the interest rate on a personal loan one is often higher than on a mortgage because here your house does not count as collateral.

Financing your holiday home with a loan from a private limited company

Do you have your own company? Then it is interesting to finance your second home from this. You then lend money from the company to yourself as a private person, so to speak. You can also arrange financing via a mortgage lender from the company. Inform yourself well in advance about the tax conditions attached to such a loan.