Second Home Loans:
Financing Your Next Investment

Second Home Loans: Your Path to Expanding Property Ownership

Whether you’re looking to buy a holiday home, secure an investment property, or plan for retirement, purchasing a second home is an exciting opportunity. At AxJ Finance Brokers, we’re here to help you make that next step with confidence and ease. Our expert mortgage brokers in Melbourne will guide you through the process. We wil make sure you understand your options and secure the best loan tailored to your needs.

Why Buy a Second Home?

A second home can serve a variety of purposes beyond just an investment. Here are some common reasons people buy a second property:

• Holiday Home: Own a retreat for your family to enjoy and rent out during peak seasons to generate extra income.
• Investment Property: Start or expand your property investment portfolio by purchasing a home with high rental demand.
• Secondary Residence: Have a place to stay if your lifestyle requires frequent travel between locations.
• Retirement Planning: Purchase a future home in a location you love, where you can eventually downsize and retire.

How to Secure a Second Home Loan

Securing a second home loan follows a similar process to your first, but there are some unique factors to consider. At AxJ Finance Brokers, we’ll assess your current financial situation, including your existing home loan, and determine your borrowing power.

• Equity for Deposit: You can use the equity from your first property as a deposit for your second home. This saves you from needing a large cash deposit upfront.
• Deposit Requirements: A 20% deposit is generally required to avoid Lenders Mortgage Insurance (LMI). However, even if you don’t have that, we can explore using equity or paying LMI to make your purchase happen.

Buying a Second Home as an Investment

Investing in property can be a smart way to grow your wealth, and purchasing a second home is a great entry point. When considering an investment property, it’s important to:

• Choose a location with high tenant appeal.
• Understand rental yield (the difference between income and expenses).
• Plan for long-term returns.

At AxJ Finance Brokers, we’ll help you evaluate the potential of different investment properties, ensuring you make an informed decision.

Purchasing a Holiday Home

A second home isn’t just about financial returns—it can also serve as your personal escape. Whether you’re looking for a weekend retreat or a beachside getaway, purchasing a holiday home offers both lifestyle and financial benefits.

Consider renting your holiday home out during peak seasons to help cover mortgage costs. However, be prepared to manage two mortgages and maintain the home, mainly if it’s located far from your primary residence. We’ll help you navigate these considerations, ensuring you find the right loan for your holiday home purchase.

How Much Equity Can You Access?

If you’ve built up equity in your current home, you can access up to 80% of its value to fund your second home purchase. Lenders typically require a property valuation to determine how much equity is available.

By leveraging your home equity, you may not need to save for a deposit, making it easier to secure a second home. Use our equity calculator or speak to one of our brokers to find out how much equity you can access.

Do You Need to Sell Your Current Home?

If you’re upsizing or downsizing, you may need to sell your current home before buying another. However, you can avoid the stress of timing both transactions perfectly with a bridging loan. A bridging loan allows you to finance a second home while waiting for your first property to sell, with interest-only payments until the sale is complete.

The Costs of a Second Home Loan

There are several costs to consider when purchasing a second home:

• Stamp Duty: Every property purchase in Australia incurs stamp duty, which varies by state.
• Lenders Mortgage Insurance (LMI): If borrowing more than 80% of the property value, you may need to pay LMI.
• Valuation Fees: Your lender may require a property valuation to assess the loan amount.

At AxJ Finance Brokers, we’ll provide a full breakdown of all the costs involved, ensuring there are no surprises along the way.

Ready to Buy Your Second Home?

Purchasing a second home is an exciting step, but it can also be complex. Whether you’re buying an investment property, a holiday home, or downsizing for retirement, AxJ Finance Brokers is here to make the process smooth and stress-free. We’ll find the best loan options for your unique situation, helping you secure a competitive rate and guiding you through every step.