Mortgages for second homes

What is a second home mortgage?

A second home mortgage is for someone who already owns a home and is looking to buy a second property.

A second house mortgage would typically be used for:

  • a property intended for use as a weekend retreat or weekday work base
  • a holiday home you use yourself or rent out occasionally
  • helping a family member get on to the property ladder

The reason for taking out a second home mortgage is important as it will affect the type of mortgage you get.

The conditions for getting a second mortgage are much the same as a first mortgage – except that the affordability checks are more stringent. That’s because having two mortgages will put you in a higher risk bracket in the eyes of lenders.

Can I get a second mortgage to buy another house?

Being accepted for a mortgage for a second home largely depends on the state of your finances. You’re more likely to be approved by lenders if you have a large disposable income or you’ve nearly paid off your first mortgage and have capacity to take on a second home loan.

Lenders will assess your track record in repaying your current mortgage and carry out affordability checks to see whether you could comfortably afford to pay the monthly instalments of two mortgages.

Like a primary mortgage, the affordability criteria for a second property mortgage is calculated on income and outgoings. The difference is that it’s usually harder to meet. Make sure your finances are in good order. You can use a mortgage calculator to see how much you could borrow and what the monthly repayments are likely to be.

What type of mortgage do I need for a second home?

If the property is to be used as a second family residence or to help a relative get on the property ladder, you’ll need a second  residential mortgage.

If you want to buy a holiday home that you plan to let for most of the year, you’ll need a holiday home mortgage.

How much do I need to buy a second house?

If you’re buying a second residential home, you’ll generally need at least a 15% deposit. But the more you can put down, the better chance you’ll have of getting the most competitive deals.

You also need to consider the extra costs of buying a second home, including additional rate stamp duty and second home insurance.

Use our stamp duty calculator for guidance on how much stamp duty you might pay.

Frequently asked questions

How do I buy a second property using equity?

You may be able to remortgage to buy a second home. The equity released can be used as a deposit. Alternatively, you may be able to get a further advance on your current mortgage to fund a deposit on your second home.

Another option is a second charge mortgage. This is a secured loan that uses your existing home as security.

How many mortgages can I have?

You can usually only have two residential mortgages at the same time. The reason is that lenders don’t want too many residential mortgages being used for investment properties.

Can I get a second home mortgage if I’m older?

There’s no legal age limit for getting a second mortgage to buy another house; it’s more important to have a high credit score and level of disposable income. That said, some lenders set their own age criteria and mortgage term lengths. For example, if you’re aged 65 and want a second house mortgage, your repayment period may be shorter than the standard 25 years.

What do I need to compare mortgages?

To compare mortgage deals, you’ll need to answer a few quick questions about your budget, deposit amount and type of mortgage you’re looking for.  

Your results are arranged in order of monthly payment. Our easy-to-understand categories will also help you check rate types, arrangement fees and introductory rates. 

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When considering mortgage affordability, it’s important to know that your home or property may be repossessed if you do not keep up with your mortgage repayments. Therefore, you need to ensure that you’re comfortable with the monthly repayments for your agreed term.

What our expert says

“Getting a second home mortgage isn’t a decision you should rush into. Your ability to pay will be closely scrutinised because having two home loans is high risk. Lenders may require a bigger deposit, charge higher interest rates and have tighter restrictions about who they lend to. Before applying, it’s a good idea to go through your finances carefully and check that there aren’t any errors on your credit file.”

Daniel Evans, from Compare the Market

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**Correct as of December, 2021.

***For the period 1st June to 31st August 2021, 8944 people responded to the recommend question. 8,226 responded with a score of 6 or above, therefore 92.0% are likely to recommend.

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