Second home mortgages
Ever wanted to buy a second home? Depending on your circumstances, it could be an option with the right mortgage. Here’s what you need to know.
What is a second home mortgage?
A second home mortgage is for someone who already owns a home and is looking to buy another property.
You typically use a second house mortgage for:
- A weekend retreat or midweek city apartment
- A holiday home you plan to use yourself or occasionally rent out
- Helping a family member get onto the property ladder.
Your reason for taking out a second home mortgage is important as it will affect the type of mortgage you need.
Lenders’ criteria for mortgages to buy a second home are much the same as they are for any mortgage – but the affordability checks are more stringent. With two mortgages, lenders are likely to consider you as a higher risk.
Can I get a mortgage to buy a second home?
Being accepted for a mortgage for a second property largely depends on your finances. Lenders are more likely to approve a mortgage for a second property if you have a large disposable income, or are close to paying off your first mortgage so can afford to take on a second home loan.
Lenders will assess your credit record and check you can comfortably afford the repayments on two mortgages.
As with a primary mortgage, the lending criteria for a second property mortgage is based on your income and outgoings. The difference is that it’s usually harder to meet.
Before you apply, make sure your finances are in good order. You can use our mortgage calculator to check how much you could borrow and how much the monthly repayments will be.
See more on how to get a mortgage.
Is there a specific type of mortgage for a second home?
There isn’t a type of mortgage specifically designed for second homes. The mortgage you need will depend on what you want to use your second home for.
Buying a second home to live in
If you’re intending to live in your second home, you need a residential mortgage. With a residential mortgage on your second or holiday home, you can’t rent out the property (even on sites like Airbnb) as this is likely to break the terms and conditions of your mortgage. If you want to rent out your home, you’ll need a different type of mortgage.
Buying a property to rent out
If you’re going to rent your second property, you want a buy-to-let mortgage. You typically need a larger deposit for a buy-to-let mortgage than for a residential mortgage, and the interest rates are usually higher.
Landlords often choose an interest-only mortgage to maximise their monthly income. With this type of mortgage, you’ll need a plan in place to pay off the balance at the end of the mortgage term.
Don’t forget to budget for any void periods when the property isn’t let. Rent guarantee insurance is a type of landlord insurance that can protect you against this.
How much is the deposit for a second home?
If you’re buying a second home, you’ll generally need at least a 15-20% deposit. But the higher the deposit you put down, the more likely you are to access better deals.
For a buy-to-let mortgage, you’re likely to need at least 25% of the property value. Some lenders may ask for as much 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 of stamp duty. In England and Northern Ireland, you’ll pay an additional 3%. In Scotland, you’ll pay an additional 6% Land and Buildings Transaction Tax.
In Wales, the Land Transaction Tax is between 4 and 16%, depending on the value of the property.
To work out the stamp duty cost for your second property, use our stamp duty calculator.
What do I need to compare mortgages?
To compare mortgage deals, you’ll need to answer a few questions about your budget and deposit, as well as the type of mortgage you’re looking for.
We’ll arrange your results in price order, so you can see at a glance how much you can expect to repay each month. Our easy-to-understand categories also help you check arrangement fees and second home mortgage rates.
Compare mortgagesWhen considering whether you can afford a second mortgage, it’s important to know that your property may be repossessed if you don’t keep up with your mortgage repayments. You need to make sure you’re comfortable with the monthly repayments for your agreed mortgage 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 lending restrictions. Before you apply, go through your finances carefully and check there aren’t any errors on your credit file.”
- Daniel Evans, Mortgages expert
Why use Compare the Market?
| 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 an 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. Compare the Market receive a percentage 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 June 2023.
Compare mortgagesFrequently asked questions
How many mortgages can I have?
You can typically have two residential mortgages at the same time.
There are no limits as to how many buy-to-let mortgages you can have, although some lenders will limit the amount they’ll lend to one person.
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 good credit score and disposable income. That said, some lenders set their own age criteria and mortgage term lengths.
For example, if you’re 65 and want a second house mortgage, your repayment period is likely to be shorter than the standard 25 years.
