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.

Buying a second residential home 

You’ll need to make it clear to your mortgage provider which is going to be your main home and which is your second or holiday home. If you’re taking out a residential mortgage on your second or holiday home, then you won’t be allowed to rent the property out (even on sites like Airbnb), as this will normally break the terms and conditions of a residential mortgage. If you’d like the option to rent out your holiday home, you’ll need to apply for a different type of mortgage.

Buying a property to rent out 

If you’re getting a buy-to-let mortgage for a property to rent out as an investment, then you’ll need to ensure that the rent you’ll bring in will be more than enough to cover your monthly mortgage repayments. It’s worth getting an estimate for rental value from an estate agent, before agreeing to buy the property.

An interest-only mortgage is a common option for landlords, as it allows you to maximise your profit on rent. However, you’ll need a plan in place to pay off the full mortgage balance, at the end of the term.

Finally, you’ll need to consider the cost of any period that the property remains vacant. Rent guarantee insurance is a type of landlord insurance that can protect you against this.

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 10-15% 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.

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.

Author image Daniel Evans

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, Mortgages expert

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Free impartial mortgage advice from our specialist partners London & Country** Get a mortgage quote in 2 minutes[1]

**London & Country Mortgages Ltd (L&C) are a multi-award winning mortgage broker with over 20 years’ experience in helping people secure their perfect mortgage. Advice is provided by L&C, who are authorised and regulated by the Financial Conduct Authority (143002).

L&C are not part of Compare the Market Limited. Comparethemarket receive a % of the commission that our partner London & Country earns. All applications are subject to lending and eligibility criteria.

L&C will not charge you a broker fee should you decide to proceed with a mortgage.

[1] Correct as of September, 2022.

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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.

How much deposit do I need for a second home?

If the second home is going to be an extra residential property, then you’ll normally need a deposit of at least 10-15%. It’s unlikely you’ll be able to get a 95% mortgage on a second home.

If the second home is being bought with a buy-to-let mortgage, then you’ll probably need a deposit of at least 20% of the property’s value. Some may need a deposit as large as 40%.

How much stamp duty do I pay on a second home?

When you buy a second home, you’ll need to pay an additional rate stamp duty fee. In England and Northern Ireland, there’s a 3% surcharge on stamp duty. In Scotland it’s a 4% surcharge for Land and Buildings Transaction Tax, while in Wales it’s anywhere between 4-16% for Land Transaction Tax, depending on the value of the property.

Use our stamp duty calculator to work out the stamp duty cost for your second property.

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.