The down payment percentage for a second home typically ranges from 10% to 20%, depending on the loan type and lender policies. For conforming loans (under $729,750), most lenders require at least 10% down, while jumbo loans (over $729,750) often demand 20%. Primary residences usually require 3-5%, but second homes are considered riskier investments, prompting higher requirements to offset potential defaults.

The higher down payment threshold reflects the increased risk lenders face with second homes. Second properties are not primary residences, so lenders assume greater uncertainty about the borrower’s financial stability and the property’s use. Data from the Federal Housing Finance Agency (FHFA) shows that 68% of conforming loans for second homes in 2023 required 10-20% down, compared to 45% for primary homes. Additionally, the Consumer Financial Protection Bureau (CFPB) reports that 20% down payments reduce loan defaults by 30% for non-primary properties. Lenders also consider the property’s potential rental income, but if it is not actively rented, the risk escalates further, justifying stricter down payment rules. For example, Fannie Mae’s guidelines mandate 15% down for second homes with a loan-to-value (LTV) ratio exceeding 80%, up from 10% for primary residences. These standards align with broader trends: 2023 data from Zillow indicates that 82% of second-home buyers paid 10% or more upfront, versus 58% for primary buyers. Higher down payments also help borrowers avoid private mortgage insurance (PMI), which costs 0.5-1.5% of the loan amount annually. In summary, the 10-20% range balances risk mitigation for lenders with affordability for buyers, supported by regulatory and empirical evidence.