Last updated: June 2025
Owning a second home—whether it’s a cozy mountain cabin, a beachside retreat, or a city condo—offers both lifestyle and financial benefits.
But as property values continue to rise, many second-homeowners are asking a smart question: Can I get a HELOC on my second home?
The short answer is yes, but there are some key considerations to understand before tapping into that equity.
This article explains how a HELOC on a second home works, what qualifications apply, and how to leverage your second property without overcomplicating your financial life.
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What qualifies as a second home?
A second home is a residential property you occupy part-time during the year, separate from your primary residence. It’s typically not used exclusively as a rental or for commercial purposes.
To qualify as a second home:
- The property must be livable year-round
- You must occupy it for part of the year
- It cannot be subject to a timeshare arrangement
- It must not be rented out full-time as an investment property
Examples include:
- A ski chalet used on winter weekends
- A summer cottage at the lake
- A downtown condo for occasional city stays
The IRS and mortgage lenders may have specific criteria, but if you use the property personally and consistently, it likely qualifies.
Can you get a HELOC on a second home?
Yes, in many cases. You can open a home equity line of credit (HELOC) secured by your second home. While this is a common strategy for primary residences, second homes are also eligible under certain conditions.
However, the terms may differ slightly:
- Lower loan-to-value (LTV) limits: Often capped at 70–80% combined LTV instead of 85%
- Higher credit score requirements: Lenders prefer applicants with excellent credit due to the perceived risk
- Stricter income documentation: You may need to show strong financials and consistent income streams
The property must also be legally classified as a second home, not a full-time rental or commercial asset.
Why homeowners use HELOCs on second homes
Tapping into your second home’s equity can unlock financial flexibility without selling or refinancing. Common uses include:
Renovating or upgrading the property
Modernize your kitchen, add a deck, or upgrade your HVAC system for enhanced comfort and value.
Paying off high-interest debt
Replace credit card balances with a lower-interest HELOC.
Investing in a new property
Use the funds for a down payment on an additional home or income-producing asset.
Covering large expenses
Tuition, medical bills, or even launching a small business.
Maintaining liquidity
Establish a financial safety net without dipping into savings.
Because HELOCs offer revolving access to funds, they’re ideal for projects or expenses that unfold over time.
Pros of using a HELOC on a second home
Access to appreciated equity
Property values in popular vacation markets have surged—your equity may be more valuable than you think.
Preserve your primary mortgage
If you’ve locked in a low rate on your primary residence, a HELOC lets you keep it intact while still borrowing.
Flexible structure
Draw only what you need and repay as you go.
Potential tax advantages
Interest may be deductible (IRS HELOC) if the HELOC is used to improve the home (consult a tax advisor).
No need to sell
Unlock funds without disrupting ownership of a beloved getaway.
Important considerations and risks
Variable interest rates
HELOCs typically have rates that fluctuate. Budget for potential increases.
Secondary property risk
Lenders view second homes as higher risk because they’re not your primary shelter. This may affect terms.
Limited rental income
If you plan to rent the home occasionally, confirm how this income affects your eligibility and any usage restrictions.
Fewer lender options
Some banks don’t offer HELOCs on second homes. HomeEQ does—offering a streamlined, digital-first process.
Repayment responsibility
You are leveraging a non-essential asset. Ensure your repayment plan is solid, especially in uncertain market conditions.
Example: Turning a seasonal home into an asset
Hypothetical scenario: Elena owns a lakeside second home in northern Michigan. The property is valued at $450,000 and has a mortgage balance of $250,000.
With rising property values and growing family needs, Elena wants to upgrade the property to make it suitable for year-round use.
She applies for a HELOC through HomeEQ and is approved for $120,000. She uses $50,000 to insulate the attic, upgrade windows, and install a modern HVAC system.
Another $20,000 goes toward paying off a personal loan. Elena draws funds in stages, repaying the first draw within the year. Her upgrades increase the home’s market value and utility, and she avoids refinancing her original mortgage.
How to get a HELOC on your second home
- Check your equity: To estimate your eligibility, subtract your existing mortgage balance from your home’s current market value. Use a tool like the HomeEQ calculator to explore your numbers.
- Verify that your property qualifies: Ensure it meets the second home criteria—used personally, not fully rented out, and legally categorized as residential.
- Review your credit and income: Lenders typically require strong credit (FICO score of 700 or higher) and consistent income, especially for second-home loans.
- Apply online through HomeEQ: Skip the paperwork and branch visits. HomeEQ’s digital-first platform makes it fast and easy to apply and get approved.
FAQs about getting a HELOC on a second home
Can I get a HELOC on a rental property?
Not in most cases. A rental property doesn’t qualify as a second home. However, if it’s a hybrid use (some rental, some personal), check with your lender.
What’s the LTV limit for a second-home HELOC?
Most lenders cap it at 70–80%. This means if your home is worth $500,000, you might be eligible for $100,000–$150,000, depending on existing mortgage debt.
Can I deduct the interest on my HELOC?
Possibly. If you use the funds to improve the second home, the interest may be tax-deductible. Always consult a tax professional.
Do I need to reappraise the property?
Usually, yes. A current valuation helps determine how much equity you can borrow against.
Final thoughts: Unlocking equity from your second home
If you’re fortunate enough to own a second home, you may also be sitting on valuable, usable equity.
A HELOC on a second home allows you to make the most of your investment, whether it’s for upgrades, personal needs, or new opportunities.
With HomeEQ, you can check your eligibility, apply online, and access your funds without delay.
It’s a smart, flexible way to turn your second home into a financial tool—without giving up the memories or future value it holds.
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