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Are you thinking about a second home? Purchasing a secondary home includes many of the same steps you’ll remember from purchasing your current home. But the costs associated with a second home go beyond another monthly payment. The mortgages you can use to buy a second home, and their qualification requirements, are different, too.

Here are some costs to consider as you decide on a second home.

Amounts will vary depending on how you’re planning on using the second home. We hope this will help you get started on your budget.


Your biggest expense will likely be your monthly mortgage payment. Did you know you can secure a mortgage on a 2nd home for as little as 10% down? Although keep in mind, if you have a lower credit score or higher debt-to-income ratio, your mortgage lender may require 20% down for a second home. With a down payment of 25% or higher, you’ll not only find it easier to take out a mortgage, but you’ll also have access to better rates.


The Outer Banks area attracts both seasonal and long-term renters. You can use this opportunity to rent your house and generate income that can be used to offset your mortgage, utilities, maintenance, and possibly more if you are able to rent on a steady basis. This could help create financial security, allowing you to further enjoy the time you personally spend in your second home. In some cases, homeowners even find themselves “cash-flow” positive at the end of the year.


Insurance on a second home generally costs a little more than on your primary residence. You could need a different type of insurance depending on whether the second home is always occupied or if you’re renting the home, long-term or short-term.


Your second home will require basic upkeep just like any property, from lawn care, a fresh coat of paint, gutter cleanings, window washing, or caulk replacement. The labor and materials required to maintain your residence can add up quickly. Experts have recommended setting aside 1% of the purchase price of the property for home maintenance each year. A property manager can help but remember this will take a bite out of your bottom line. 

If you are in an area with a Homeowners Association (HOA) budget for this as well. This is sometimes a yearly or monthly fee.



The property must be far enough away to qualify as a second home. Generally, lenders will only consider a property a second home if it is at least 50 miles away from your primary residence.


In addition to deducting the costs of mortgage interest, you can deduct costs for advertising, cleaning, depreciation, insurance, maintenance, repairs, taxes, utilities, and other fees associated with renting the property.

Matt Myatt is available for all your Outer Banks real estate needs and specializes in luxury homes from Corolla to Hatteras Island in exclusive communities such as The Whalehead Club, The Currituck Club, Buck Island, Corolla Light, Pine Island, Ocean Sands, and as far south as Kinnakeet Shores. Matt Myatt will guide you every step of the way, and his vast local knowledge of the Outer Banks and North Carolina will help you find the exact home you’re looking for and get the most out of your investment.