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Compare second home mortgage rates

Written by

Andrew Dehan

Edited by

Laurie Richards

Edited by

Laurie Richards

On Friday, February 21, 2025, the national average 30-year fixed mortgage APR is 6.94% according to Bankrate's latest survey of the nation's largest mortgage ... lenders. Use Bankrate's rate table to compare today's second home APRs.

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Current second home mortgage rates

Mortgage rates fluctuated between 6 and 7 percent for most of 2024 before climbing above the 7 percent mark at year's end and hovering there for the start of 2025. Many housing experts predict that rates will settle in the 6s for much of 2025 and that movement below that threshold is unlikely.

Keep in mind that second home mortgage rates are typically higher than primary residence interest rates. That's because they hold more risk — if you’re struggling financially, you’re much more likely to pay the mortgage on the home you live in than the one you vacation in or rent out. For context, the chart below shows current rates you could be quoted for a mortgage on a primary residence.

National mortgage rates by loan type

Product	Interest Rate	APR
30-Year Fixed Rate	6.90%	6.94%
15-Year Fixed Rate	6.19%	6.26%
5-1 ARM	6.20%	6.95%
30-Year Fixed Rate FHA	6.87%	6.92%
30-Year Fixed Rate VA	6.67%	6.72%
30-Year Fixed Rate Jumbo	7.02%	7.08%

Rates as of Friday, February 21, 2025 at 6:30 AM

Product	Interest Rate	APR
30-Year Fixed Rate	6.86%	6.90%
15-Year Fixed Rate	6.14%	6.22%
5-1 ARM	6.17%	6.93%
30-Year Fixed Rate FHA	6.86%	6.91%
30-Year Fixed Rate VA	6.47%	6.51%
30-Year Fixed Rate Jumbo	6.95%	7.00%

Rates as of Friday, February 21, 2025 at 6:30 AM

Bankrate has been the authority in personal finance since it was founded in 1976 as the “Bank Rate Monitor,” a print publication for the banking industry. Bankrate has been surveying and collecting mortgage rate information from the nation’s largest lenders for more than 30 years. Hundreds of top publications, such as The New York Times, Wall Street Journal, CNBC and others, depend on Bankrate as a trusted source of financial information, so you know you’re getting information you can trust.

Learn more: Historical mortgage rates

What’s the difference between a second home and investment property?

The main difference between an investment property and a second home hinges on occupancy: If you personally live in the property for two weeks or less per year, you have a good case for classifying it as an investment, based on IRS guidelines. If you spend more than 14 days in the property each year, it’s a second home.

Learn more: Second home vs. investment property

Should you get a second home mortgage?

Whether to take out a second home mortgage is a personal choice. There are various ways to finance an additional property. For example, you could tap the equity in your primary residence with a home equity loan or borrow against your investments. Or, of course, you could pay cash. If you have the means to do so, then the decision comes down to what kind of a deal you can get on a second home mortgage. If the rate and terms are attractive, then it might make more sense to take out the loan, rather than delete capital or savings.

As with any major financial decision, it’s important to weigh the pros and cons of a second home mortgage.

Pros of second home loans

You can get tax deductions. You can deduct the mortgage interest for both your primary residence and second home up to $750,000 (or $375,000 if married filing separately). This applies only to a “qualified” second home, meaning you don’t rent it out or rent it out but also use it yourself for a certain period each year. You can also deduct combined property taxes up to $10,000.
You can use your primary residence to help pay for it. You can take advantage of the equity in your primary residence to make a down payment on a second home, either through a cash-out refinance or home equity line of credit (HELOC). It might be better to do a cash-out if you know exactly how much money you need, can get a lower interest rate on your first mortgage and don’t plan to pay that first mortgage off anytime soon.

Cons of second home loans

It costs more. Generally, you can expect to have a higher mortgage rate on your second home loan compared to the one on your primary residence, so you’ll pay more in interest over time. You might also have a higher rate if you decide to refinance your second home mortgage down the line. Along with that, you’ll need to make a bigger down payment.
It can be harder to qualify for. Because the second home isn’t your primary residence, you’ll need to meet stricter credit and DTI ratio requirements.

How to get a second home mortgage

Get your finances in order: Well before applying for a second home loan, take steps to maintain or improve your credit score, as well as plan for a down payment. Lenders tend to give the best rates to borrowers with higher credit scores, lower debt-to-income ratios and higher down payments.
Pay down debt: Before applying for a second home mortgage is a good time to pay off or pay down debts. Understanding and lowering your debt-to-income (DTI) ratio, which impacts whether you qualify and your interest rate, can result in a better mortgage offer. Lenders will want to know the full extent of your obligations — home loans, car loans, student debt, medical debt, as well as credit cards and personal loans.
Compare rate quotes: When you’re ready to look for properties, get second home interest rate quotes from at least three mortgage lenders. You can try a wide variety of lenders, including local banks, online lenders and credit unions. Consider the loan’s APR, or annual percentage rate, which reflects both the interest rate and any lender fees and points. What’s more, read customer reviews and see if the lender has won any awards for customer service.
Complete the application and close: Once you’ve been preapproved, find the second home you want to buy and put in a good offer. If your offer is accepted, choose the lender you want to go with and apply. You’ll need to go through underwriting and get an appraisal, like you did with buying your first home. Then, if all goes well, you can close on the property and get the keys.

Second home mortgage FAQ

Mortgage rates for second homes are based on a variety of factors, including the borrower's creditworthiness, the loan-to-value (LTV) ratio, the loan amount and term, the property type and overall market conditions. Here’s how each factor weighs in:
- Creditworthiness: A higher credit score and a lower debt-to-income (DTI) ratio yield a better interest rate. For a second home mortgage, you’ll typically need a credit score of 660 and a DTI of 45 percent or less.
- Loan-to-value (LTV) ratio: The LTV is the ratio of the loan amount to the appraised value of the property. A lower LTV indicates a lower risk for the lender, which can lead to a lower interest rate. Second-home lenders typically prefer a lower LTV, ideally below 80 percent.
- Loan amount and term: The amount and length of the loan also affect the interest rate. Higher loan amounts and longer terms can translate to higher interest rates.
- Property type: Not all properties are created equal in lenders’ eyes. Some condos and co-ops can be difficult to finance, for example. If it’s a property you plan to lease out, the lender might also consider rental income it generates.
A second home mortgage helps pay for a second home or vacation home. Unlike the mortgage for a primary residence — where you live most of the time — a second home mortgage typically requires a larger minimum down payment and has a slightly higher interest rate, and can have stricter requirements when it comes to cash reserves and debt-to-income (DTI) ratio.

A mortgage for a primary residence, for instance, might only require 3 percent or 5 percent down, while a second home mortgage might require at least 10 percent. In addition to that, you’ll likely need two to six months’ of reserves, depending on your credit and financial profile, to ensure you’re able to cover mortgage payments on both your primary residence and second home.

Your DTI ratio, meanwhile — which helps determine your ability to repay the loan — might max out at 43 percent, although some lenders cap it at 36 percent. On primary residences, there’s usually flexibility up to 50 percent.
You can refinance a second home mortgage, but as with any refinance, it’s crucial to ensure the savings outweigh the closing costs. Because interest rates are higher on a second home mortgage, it can take you longer to recoup these costs. You might also need more equity in your second home in order to refinance and, as with the initial loan, sufficient cash reserves.

Additional resources on second home mortgages

Meet our Bankrate experts

Written by: Andrew Dehan, Writer, Home Lending

I’ve covered mortgages, real estate and personal finance since 2020. At Bankrate, I’m focused on all of the factors that affect mortgage rates and home equity. I enjoy distilling data and expert advice into takeaways borrowers can use. Prior to Bankrate, I wrote and edited for Rocket Mortgage/Quicken Loans. My work has been published by Business Insider, Forbes Advisor, SmartAsset, Crain’s Business and more.

Compare second home mortgage rates

Current second home mortgage rates

National mortgage rates by loan type

Why trust Bankrate’s mortgage rates

What’s the difference between a second home and investment property?

Should you get a second home mortgage?

Pros of second home loans

Cons of second home loans

How to get a second home mortgage

Second home mortgage FAQ

How are second home mortgage rates determined?

What are the differences between mortgages for a primary residence and a second home?

Can you refinance a second home mortgage?

Additional resources on second home mortgages

Meet our Bankrate experts

Mortgage rates in other states