Loan for secondary residence
A loan for a secondary home is a loan used to buy a home other than your main home, for example a holiday home or a rental property.
This is how we help you:
Fill in the application form
It only takes a few minutes and is completely
free and non-binding for you.
We talk to the banks
Your advisor will talk to our partners and find the
best solution for you.
Receive a non-binding offer
Once we've landed the solution we
most believe in, we'll contact you for a
no-obligation quote.
Buy property no. 2 with security in property no. 1
To get a loan for a secondary home, you will usually have to meet certain requirements, including a good credit score and an adequate income. Lenders will also assess the value of the home you want to buy, as well as any existing loans you have.
It is important to note that loan offers and interest rates may vary depending on the lender and your financial situation. You may want to compare offers from different banks to find the best loan for you.
It is also important to remember that taking out a loan for a secondary home can involve an increased financial risk. You will have to pay off two loans at the same time, and if you use the home as a rental property, you will have to deal with any issues with the tenant as well as maintenance and repair costs.
Be sure to carefully consider whether you can afford to take on this risk before taking out a loan for a second home
What is secondary housing?
A secondary dwelling is a dwelling that is owned in addition to a main dwelling/primary dwelling.
It can be a holiday home, a rental property or a home that is used as an investment. The difference between a secondary residence and a primary residence is that the main residence is the primary residence of the owner and is used as a residence, while the secondary residence is used for other purposes.
A holiday home is a home owned for recreational purposes and is often located in a different region or country. A rental home is a home that is owned to rent out to one or more people, and an investment home is a home that is owned to make money through buying, holding and selling homes.
There can be many reasons to own a second home, such as having a place to spend vacations, having an extra source of income through rental or investing in real estate.
Equity secondary residence
How much equity do you need to buy a second home?
Previously, there was a requirement for 40% equity, but now the same requirement applies as for primary homes, which is 10% equity.
When you apply for a loan from the bank, the bank will take into account any interest rate increases in the future. This applies to both the primary home and the secondary home. The bank will also ensure that the total loan amount does not exceed five times gross income (including rental income).
Read more about annuity loans vs serial loans here →
Tax on the rental of secondary housing
Generally speaking, rental income from a secondary home will be considered taxable capital income. A 22% tax will be calculated on the profit after deduction of expenses. Expenses that can be deducted include, among other things:
– interest expenses on any loans linked to the property
– property tax
– maintenance and repair costs
– insurance and any property management expenses.
It is also important to note that there may be different tax rules for renting out a secondary home that is used as a holiday home, compared to a secondary home that is used solely for rental purposes.
If you own a secondary home in Norway and are considering renting it out, it is recommended to seek advice from a tax expert to ensure that you follow all applicable tax rules and deductions.
The Norwegian Tax Administration calculates a housing value (estimated market value for housing) based on Statistics Norway’s statistical information on sold homes. The calculation takes into account your home’s location, area, year of construction and type of home. The home’s housing value is equal to the home’s area multiplied by the price per square meter based on statistics on sold homes
The asset value is a given percentage of this housing value. Calculated with 25% on primary housing under 10 million (70% of market value on excess value over 10 million) and 100% on secondary housing because the latter is considered a money investment/savings.
Tax on the sale of a second home
You must pay tax on the gain on the sale of a second home. This is tax-free only in cases where you have lived in the home yourself (and had a registered address there) for at least one of the last two years.
The profit is entered in the tax return and is taxed as ordinary income at 22 per cent.
Do you want to invest in a rental property, but are unsure about tax rules, equity requirements and valuation? This is something you should know before you buy a second home that you plan to rent out.
Firstly, you should be aware of the tax rules that apply to rental properties. In addition, you should be aware of any equity requirements when applying for a loan for a second home.
The banks may have different requirements for equity, and this may affect your ability to buy. In Norway, the main rule is that a mortgage should not exceed 90% of the value of a property.
Value estimate
- Another factor that is important to consider when you buy a rental property is the valuation. You should be aware of the factors that affect the value of your home and investigate what the market price is in the area you are considering buying in.
- We help you check historical prices for the property you are interested in, what the average price is in the immediate area and what neighboring properties are selling for.
Rent out yourself, or through a broker?
- Finally, you may want to consider whether you want to manage the rental process yourself, or whether you want to leave this to a rental company, such as Utleiemegleren. This can affect how much time and effort you have to put into the project, and can thus have an impact on your profitability.
- In summary, it is important to have a good knowledge of tax rules, equity requirements and valuation when you buy a rental property. Doing thorough research and having realistic expectations can help increase the chances of you making a good investment.
Loan calculator secondary residence
Totalbeløp
Kostnad
Etabl.gebyr
Termingebyr
Effektiv rente
This is how we help you:
Fill in the application form
It only takes a few minutes and is completely
free and non-binding for you.
We talk to the banks
Your advisor will talk to our partners and find the
best solution for you.
Receive a non-binding offer
Once we've landed the solution we
most believe in, we'll contact you for a
no-obligation quote.
With us you get help with loans
Through our partnerships with several banks and credit institutions,
we have extensive knowledge of the solutions and products available.
Together we review your financial situation and find an optimal solution for you.
- Elisabeth Eland, Eiendomsfinans Bergen
Free and quick case management
With us, you will be assigned a permanent advisor who will help you throughout. After
a pleasant conversation with you, we map your financial situation.