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Second Home vs Investment Property Calculator
Lenders price investment-property loans 0.75-1.00% above second-home loans and require 15-25% down vs 10%. This calculator quantifies the monthly premium and extra closing cash so buyers can decide whether to classify a property as a part-time second home (rental restrictions apply) or a true investment with full short-term and long-term rental flexibility.
Typically 0.75%-1.00% over second-home rate
Conventional investor minimum is 15-25%
Second-home P&I
$2,694
Investor P&I
$2,610
Investor monthly premium
-$84
Extra payment if classified as investment
Extra cash to close (investor)
$45,000
Second-home down
$45,000
Investor down
$90,000
How the math works
Lenders treat second homes (must be owner-occupied part-time, no rentals) almost like primary residences — 10% down, primary-rate pricing. Investment properties get worse pricing: 15-25% down minimum and a 0.75-1.0% rate add-on plus loan-level pricing adjustments (LLPAs).
Misclassifying an investor loan as a second home is mortgage fraud. Lenders verify with utility usage, mileage from primary, and post-close occupancy audits.
How to Use
- Enter price, your second-home rate quote, and the investor rate quote (typically 0.75-1% higher).
- Enter both down-payment percentages (typically 10% second-home, 15-25% investor).
- Compare monthly payment delta and extra cash required at closing.
Frequently Asked Questions
Why does the rate matter so much?
Fannie/Freddie loan-level pricing adjustments (LLPAs) charge 1.875%-3.375% for non-owner occupied loans depending on LTV — lenders bake that into the rate or as upfront points.
Can I rent a second home?
Conventional second-home loans require the property to be available for your personal use year-round. Short-term rentals are typically allowed but the home cannot be subject to a rental management contract or generate primary income.
What if I want to refinance later?
If you refinance and the property has become a rental, you must refinance as an investment loan with the rate and LTV restrictions of investor financing.
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