Houseboat financing: How to fund your floating home

If you’ve ever dreamed of waking up to the sound of water beneath your home, a houseboat might be the perfect option. Not only are houseboats often more affordable than traditional homes, but they also offer the freedom to travel, letting you explore new destinations without ever leaving your living space.

The challenge is that you can’t use a conventional mortgage to get houseboat financing. Instead, you’ll need to utilize another form of financing. Fortunately, there are many options available, especially for well-qualified buyers.

Houseboat loans vs. floating home loans

While the terms sound alike, houseboats and floating homes aren’t the same. Floating homes are permanent residences built on a floating foundation, usually docked in a marina. They’re more like a traditional house on water. Houseboats, on the other hand, are mobile—you can steer them to different locations, which makes them more like a cross between a boat and a home.

This difference matters for financing. Many people think a “boat mortgage” applies to all water homes, but that’s not the case. Floating homes can sometimes qualify for a boat mortgage because they’re considered permanent residences. Houseboats, being mobile, don’t qualify, so you’ll need to look at other financing options.

Houseboat financing: A guide to your options

The price tag on houseboats ranges widely; budget-friendly options cost around $30K, mid-range anywhere from $100K to $200K, and luxury houseboats running up to $500K or more.

If you’re ready to make the leap onto the water but don’t have the cash to pay upfront, there are a few ways to fund your houseboat:

Traditional loans

The first option is to contact your local bank or credit union to see if you’re eligible for a houseboat-specific loan. Houseboats typically depreciate in value, so financing houseboat purchases is more similar to buying a car, not a house.

You get a lump sum to buy your houseboat and pay it back over a set term, usually 5–20 years. How much you can borrow depends on your credit, income, and the boat’s value.

Requirements:

• Good credit
• Proof of income
• Boat appraisal in some cases
• Proof of insurance

Things to consider:

• Interest rates can be higher than a mortgage
• Lenders often treat the houseboat as personal property rather than real estate
• Missed payments could mean the boat gets repossessed

Personal loans

You can also apply for a personal loan, which is a type of loan with equal monthly payments and a 2 to 7-year term. The benefit of a personal loan is that you don’t have to provide collateral, and you can use it for any purpose, whether you want to get a houseboat loan or take a vacation.

Requirements:

• Good credit
• Steady income
• Reasonable debt-to-income ratio

Things to consider:

• Interest rates are usually higher than secured loans
• Loan limits might be lower than you need for larger houseboats
• Defaulting impacts your credit score
  

Marine loan broker financing

A marine loan broker is basically a matchmaker for boat financing—they help connect buyers with lenders who understand houseboats.

You share your finances, and the details of the houseboat you want, and the broker finds lenders that offer the best rates and terms for your situation.

Requirements:

• Credit check and proof of income
• Houseboat details (make, model, value)
• Proof of insurance

Things to consider:

• Brokers charge fees or commissions, usually built into the loan
• They save you the hassle of contacting multiple lenders
• Great for first-time buyers who aren’t familiar with boat financing

Home equity loan or HELOC

If you already own a home, tapping into your equity can be a flexible way to fund your houseboat. Home equity loans give you a lump sum with a fixed interest rate, while home equity lines of credit (HELOCs) let you borrow as you go, with a variable rate.

Both of these options typically have lower interest rates than other lending options, such as personal loans, because your house serves as collateral for the loan.

Requirements:

• Enough equity in your home
• A credit score of 620 or higher
• Sufficient income

Things to consider:

• There are generally appraisal fees and closing costs associated with these
• Adds debt on top of your mortgage
• Your home is collateral—missed payments could risk foreclosure

Home equity investment

If you prefer not to make monthly payments, consider a home equity investment (HEI). With a home equity investment, you’ll get a lump sum in exchange for sharing a slice of your home’s future appreciation. Homeowners settle the investment anytime during a flexible 30-year term when they sell, refinance, or use another source of funds.

Requirements:

• Have sufficient equity
• A credit score of 500 or higher
• No income requirements

Things to consider:

• There are appraisal fees and closing costs
• Investment is settled via lump sum payment

The bottom line

Can you get a mortgage on a boat? No, you can’t get a conventional mortgage if you live on a movable houseboat. However, some people might refer to a marine loan or a boat loan as a boat mortgage, but that’s not an entirely accurate description.

The good news is that if you want to buy a houseboat, there are several financing options available, especially if you have good credit. Once you decide the loan amount you need, choose the type of financing you prefer, whether that’s a boat loan, personal loan, or Home Equity Investment. Then, once approved, you’ll be well on your way to living in your dream home on the water.

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