How to finance a houseboat

  • Houseboats differ from floating homes, and so do the loans for each.
  • Mortgages for floating homes sport higher rates than for houses on land.
  • Living on water entails unique fees and higher maintenance costs.

You don't have to be a millionaire to own a house on the water -- as long as you are willing to live in a home that floats.

If you can picture yourself waking up to the sound of seagulls in the morning, love a relaxed lifestyle and don't mind walking a few extra steps to carry your groceries down to the dock, a floating home may be an option to consider when shopping for a house.

Floating homes can sell for as little as $100,000 to more than $1 million, depending on the location and the size. In some parts of the country, many first-time homebuyers find it cheaper to buy on water than land, says Denise Carlson of Seattle Metropolitan Credit Union in Seattle, home to some of the largest floating home communities in the United States.

"There are a lot of first-time homebuyers and young adults who are getting down payments from their parents and are looking at houseboats," she says.

Houseboats vs. floating homes

Carlson works with borrowers who seek financing to buy houseboats and floating homes. Yes, there is a difference between the two. A houseboat is actually not a house. It's a vessel and it moves. Therefore, when you get financing for a houseboat, it's normally a recreational vehicle loan. It's almost like you are financing a car.

A floating home, which looks more like a house, is a stationary structure that sits on water and cannot propel itself. A floating-home loan is an actual mortgage that allows you to finance the property over a longer period. RV loans generally have shorter terms, but some lenders offer 20-year financing on houseboats.

Getting a mortgage

Financing a houseboat or getting a mortgage for a floating home is not as much of a hassle as it may sound. But you'll have to look harder for lenders, as few of them offer these loans. Real estate agents who specialize in selling these types of homes should be able to refer you to lenders. Homeowners associations can offer referrals, too.

Loans used to purchase floating homes or houseboats will cost you more in interest than a traditional mortgage. "A lot of banks don't understand or don't want to deal with these loans, and because of the lack of supply, the lenders that do offer them charge you more in interest," says Stan Barbarich, president of the Floating Homes Association in Sausalito, Calif.

Expect to pay 1 to 2 percentage points more for a mortgage on a floating home than on a loan for a house on land. For houseboats, it's more likely you'll pay 3 percentage points more.


Show Bankrate's community sharing policy
          Connect with us

Timely market news and advice for consumers ready to buy, sell or invest in real estate. Delivered weekly.


Greg McBride

Greg McBride: Lay down ARMs?

Don't rule out adjustable-rate mortgages as interest rates rise.  ... Read more

Partner Center

Connect with us