Buying a Holiday Home: Financing Tips for Lifestyle Buyers

Dreaming of a beachside retreat? Buying a holiday home can be a rewarding investment, not just financially, but for the lifestyle perks too. Whether you’re looking to create family memories, generate rental income, or lock in a long-term asset, getting the right finance in place is key. Here are our top financing tips for lifestyle buyers looking to make their holiday home dreams a reality.

Buying-a-Holiday-Home-Financing-Tips-for-Lifestyle-Buyers

Define the Purpose of the Property

Before approaching a lender, be clear about how you plan to use the property. Will it be:

  • A weekend getaway for your family?
  • A short-term rental listed on platforms like Airbnb?
  • A long-term investment for future retirement?

Lenders assess risk differently depending on how the property will be used. A purely personal holiday home may be seen as higher risk than a rental property generating income, so your loan terms could vary.

Understand Your Loan Options

You might assume a standard home loan applies, but financing a second property often requires different criteria. Options may include:

  • Investment Loans: If you plan to rent the property, these are tailored to generate income and may allow for interest-only repayments.
  • Equity Release: If you own your main home, you could tap into your equity to fund the deposit or even the entire purchase.
  • Split Loans: A combination of fixed and variable rates can offer more flexibility, especially if your income from the property fluctuates seasonally.

A mortgage broker can walk you through what suits your situation best.

Factor in Extra Costs

Buying a holiday home comes with expenses beyond the purchase price. Don’t forget to budget for:

  • Council rates and water charges (which can be higher in regional or coastal areas)
  • Insurance premiums (holiday homes may attract higher premiums)
  • Ongoing maintenance and repairs
  • Property management or cleaning fees if you’re renting it out

It’s also wise to plan for periods when the property may sit vacant.

Improve Your Borrowing Power

If you’re still paying off your primary residence, lenders will assess your ability to service multiple loans. To boost your chances:

  • Pay down existing debts, like credit cards or personal loans
  • Ensure your income and expenses are well-documented
  • Maintain a strong credit score

Lenders will also look at your overall financial position, including savings, employment stability, and other liabilities.

Consider the Tax Implications

If your holiday home doubles as an investment, you may be able to claim deductions for expenses like mortgage interest, maintenance, and management fees. However, you’ll also need to declare any rental income.

Capital gains tax may also apply if you sell the property in the future, so it’s worth chatting with your accountant or financial adviser before you buy.

Work with a Mortgage Broker Who Understands Lifestyle Purchases

At BrokerCo, we specialise in helping Australians secure finance for all types of properties, including lifestyle and holiday homes. We’ll help you:

  • Compare loan products across multiple lenders
  • Find flexible features that suit both personal and rental use
  • Maximise your borrowing potential without overstretching

We’re here to make the process smooth, less-hassle, and tailored to your financial goals.

Ready to Buy Your Holiday Home? Let’s Chat.
Contact the team at BrokerCo for expert, obligation-free guidance on your holiday home finance options.

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