Head of Content
Mortgage Advisor & Director
What is a second home mortgage?
Our advisors are often asked if you can have two mortgages, and the answer is yes, it is possible to have two mortgages.
If you are considering buying a second home or a buy to let property, you may also be looking for a second mortgage.
A second mortgage is a mortgage on a second property. Both your first and second mortgages are secured against each respective property. The second property may be your part-time home, for example, if you commute long distances, or it may be a holiday home or buy to let property.
Second home mortgages can also be referred to as second property mortgages. This is because your second property doesn’t necessarily have to be an additional home. You may instead be purchasing an investment property, such as a buy to let or holiday home.
What is a second charge mortgage?
A second charge mortgage is a second mortgage on your existing home, which is different from a new mortgage on a second home.
How to get a second home mortgage
Affordability will play a significant role in your ability to secure a second mortgage.
Lenders will be aware of your first mortgage, and will need comfort that you can afford to keep up repayments on both mortgages. Having plenty of disposable income and an excellent credit record will help. Minimising your monthly outgoings before you apply for the second mortgage will also play to your advantage.
The lender will be concerned with the purpose of the second property.
For a buy to let property, the investment value, or rental yield, will be equally as important as your personal ability to repay the loan. Lenders will typically look for the rental income to cover a minimum of 125% of the mortgage repayments. You will need a buy to let mortgage for this option, and can expect to pay higher rates and require a larger deposit than for residential mortgages.
If the property is a second home, your personal affordability will play more of a role.
Your salary should be balanced with your outgoings to demonstrate you can afford to make both repayments. If you are looking to buy a new home before selling your existing home, you can apply for a second residential mortgage on the basis that you will only be living in one home and not renting the other out.
How much stamp duty will I pay for a second mortgage?
If you buy a second home in England or Wales you will pay an additional 3% in Stamp Duty charges.
You can apply for a Stamp Duty refund on additional duty paid if you sell one property within three years of buying a second home.
How can I learn more?
Our team of experienced have many people to secure a mortgage on a second property. As it can be a complex process, we would recommend engaging a broker to guide you through. Whether you are looking to buy a second home, holiday home or buy to let property, our advisors can make sure you get the best rates possible.
Complete our simple form today to get started.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.
