Owning a cottage can be a wonderful thing if you enjoy leaving the concrete jungle that is city life and embracing the green oasis that is country life.

When the warm weather arrives, nothing beats loading up the family car with loved ones, luggage, and other goods, and making the trek to the family cottage. Unless you were gifted one or had a sizable enough cash pile to buy one outright, you will need to obtain a mortgage to make your dreams of owning a cottage come true.

Here are some key factors to getting a mortgage for a cottage. What you’ll find is that lenders will consider certain criteria before deciding whether or not to approve your cottage mortgage request.

Location, Location, Location

Lenders will want to assess the cottage you want to buy to determine, first, if they should lend you the money you need and to determine how much they are open to lending if your request gets the go-ahead. In addition to location, lenders will look at specific things such as the following:

  • Proximity to reliable water source, which can impact the value of the property
  • Access to the cottage — year-round access is preferable
  • Distance between cottage and major market
  • Cottage use — lenders prefer year-round, or even three-season cottages over one or two-season cottages

Nitty Gritty Issues

You will need to get mortgage default insurance if you can’t come up with a down payment of 20% or more of the cost of the cottage. Since second-home mortgages are no longer insurable by the Canada Mortgage and Housing Corporation, you will have to find a private mortgage insurance firm in the event that you require mortgage default insurance.

How Much Can You Afford?

Lenders will, of course, want to be reasonably certain that you have the financial wherewithal to repay the loan. That means you need to have the sort of income that shows that you are capable of repaying however much you want to borrow.


In the event that you can’t get the full loan amount you require, you will have other options on the table. For instance, you could potentially refinance your house or tap a line of credit to supplement what the lender is willing to lend you.

Words to The Wise

Getting the cottage of your dreams will take planning if you can’t pay it off in one shot, but obtaining a mortgage is possible. When you know the key factors to getting a mortgage for a cottage, you’ll be that much closer to enjoying your new cottage.