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What to Know When Buying a Camp/Cottage

There’s no better place to spend a sunny day than at a camp (or cabin/cottage if you’re not from around these parts). But while having a camp can be relaxing, figuring out how to pay for it can be stressful. Here are some things to consider to put you in control of making your dream camp a reality. 

What Type of Camp Are You Buying? 

First, there are two main types of camps, each with their own considerations. A “winterized” camp is classified as a second home. These are built for year-round access with a permanent heat source, potable running water, and built on a permanent foundation. They require a minimum 5% down payment (though there’s an insurance premium if less than 20%) and there are more credit requirements, which we can review with you to ensure the right solution. If the camp is built for seasonal access (no permanent heat source, built on a floating foundation such as concrete rocks or pilings, still required to have indoor plumbing) it’s classified as a vacation home and requires a minimum 20% down payment.  

Financing Your Vacation Home 

You can use equity from your primary home to finance the purchase, but regardless of what type your dream camp is, be prepared for slightly higher interest rates than on standard mortgages. You’ll be able to choose between fixed and variable terms with maximum amortization periods of up to 25 years. When budgeting, don’t forget to account for more insurance and taxes. 

Other Things to Consider 

Some other considerations are: What kind of shape is it in? How much will you need to make immediate repairs and updates and what will you need over the next couple years?  

Can your retirement plan afford the camp? If you’re not able to contribute at least 10% of your combined gross income to RRSPs annually you may want to re-evaluate. Your camp will probably be your second biggest asset after your home, so make sure you’re comfortable relying on the real estate markets over a more diversified investment plan. 

Working with an Advisor who specializes in our region can give you the confidence to make informed, smart buying decisions. Contact us today to get the advice you deserve for your financial future and fulfill your dream of owning a vacation property.


Need advice? Just ask.

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