30 JUNE, 2021

Whether you purchase a property for letting it out or use it for self-occupancy, its value appreciates over time and can give you profitable returns. Many people purchase a second home to use it as a vacation home too. However, irrespective of whether you are buying a property for the first time or second time, it generally involves high amounts of funds, which can be difficult to arrange entirely out of your savings.

But worry not. If you are looking to fund your second home, it’s time to learn more.

Home Loans

Instead of waiting for a decade or two to buy a second home you dream of, you can avail a home loan. You can choose a flexible tenure and repay the loan over a comfortable duration. All you need to do is check the required eligibility and documents and proceed with the application process. You can also calculate your home loan EMI to determine your affordability and accordingly choose a second home.

Top-up Loan

If you are already servicing a home loan, you can avail a top-up loan. With this, you need not do all the formalities of availing a home loan. The lender already has all your documents, therefore, adding a top-up loan would be much easier and quicker.

However, if you are purchasing a second home using a top-up home loan, it is advised to review your financial standing. Purchasing both homes through home loans would increase your debt obligation, affecting your budget.  


If you have investments in stocks, fixed deposits, mutual funds, etc., you can use them for funding your second home. However, ensure that you do not break your emergency fund or dig into any investment vehicle reserved for other financial goals.

Things to Consider While Buying a Second Home

  • Look for sustainable funding
    It is usually not wise to mortgage your current property to fund your second home. Unfortunately, if you face an unforeseen situation blocking your income flow, you might lose both homes.
  • Ascertain the cost
    Before you sign below the dotted line on the sale deed, ensure that you have ascertained all the cost of buying that second home. Apart from the sale price, it would also include cost of maintenance, insurance, repairs, taxes, etc. Ensure that you have taken into account all costs before looking for funding.
  • Purpose of your purchase
    It is advisable to determine the purpose of purchasing a second home beforehand. What do you plan to use it for? Is it for your personal use or for letting out? If it's for rent, is it in a good location? Answering these questions would help you do a cost-benefit analysis and decide the source of funding. 

To sum up, purchasing a second home is a significant investment to make. Ensure that you do not exhaust all your savings for it. Availing a loan to finance your property could be a better option. With us at Kotak Mahindra bank, you can avail a home loan with a flexible tenure of 20 years, low processing fees and no hidden charges.





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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.