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Mortgages for second homes
A second-home mortgage is a loan you take out to buy a second property. It’s not the same as a second charge mortgage, which allows you to take out a loan to access the equity in your existing home.
The type of second-home mortgage you can get will depend on what you plan to do with the property, for example, whether or not you want to rent it out.
Second residential mortgageÂ
With a second residential mortgage, most lenders say the property must be for personal use only, for example as a second residence or a property closer to work to use during the week. Some lenders will let you use a second residential mortgage to provide accommodation for dependents, but others have rules preventing this.Â
And while most will allow you to buy a holiday home, this also varies between providers. If you want to let out the property, even periodically, you will generally need a commercial buy-to-let mortgage.
Buy-to-let mortgage
If you’re planning to get a second home that you rent out, you’ll probably need a buy-to-let mortgage. However, if the property is a holiday property, you might be better off with a holiday-let mortgage rather than a standard buy-to-let.Â
You will usually need a commercial mortgage, even if you plan to use the property as a holiday home for your family most of the time and only let it out every now and then. If you want to buy a property in the UK for renting out, you can compare buy-to-let mortgages.
Overseas mortgage
Most high street banks will not allow you to use a second-home mortgage to buy overseas, although some have international mortgage services you can use. So if you’re planning to buy a second home abroad, you may need to contact a specialist lender.
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How to get a mortgage for a second home
The process of getting a residential mortgage for a second home is not dissimilar to applying for a standard residential mortgage.
Once you know what kind of mortgage you need, you then need to find a bank or building society that’s happy to lend you the cash.
Can I get a second home mortgage?
Yes, but with any mortgage you’ll want to shop around to get the best deal. For a second-home mortgage, it may be worth speaking to a specialist broker who can help you find the right lender and the best rates.
You’ll have to answer some questions about how you intend to use the property, so the lender can ensure that you’re applying for the right product.
You also have to meet strict affordability criteria, as you did for your primary mortgage. If you’re still paying off your first mortgage, these repayments will be taken into account by lenders. And you won't be approved if you can’t afford to make the repayments on top of your existing mortgage.
How much deposit is needed for a second home?
A deposit for a second-home mortgage is likely to be higher than for a first home, with most lenders requiring at least 15% of the purchase price.
If you want a buy-to-let mortgage, meanwhile, you will typically need a deposit of at least 25%. If you want a holiday-let mortgage, you might need to put in as much as a 30% deposit.Â
Other costs to consider include second home Stamp Duty, which is an additional 3% on top of what you’d pay for a first home in England and Northern Ireland. The interest rates on second-home mortgages are typically higher too, which means this type of borrowing is often more expensive.
Are second-home mortgages the same as normal mortgages?
They’re very similar. Both products are loans with interest attached that can be used to buy a property.Â
The main differences are:
Lenders ask for a higher deposit
The affordability checks may be more thorough
You typically pay higher interest rates
You have to pay extra Stamp Duty charges.
Second-home mortgages tend to be more expensive as a result, and you need more up-front capital to get one too.
Can I afford a second mortgage?
The first thing to consider is that you’ll need a reasonably large deposit, as most lenders require between 15% and 30% of the loan amount.Â
You’ll also need to calculate how much you’ll owe in Stamp Duty, including the second-home surcharge. And on top of that, you’ll need to pay the surveyor’s and lawyer’s fees. Even if you have a big deposit, you’ll also need to show that you can afford the monthly repayments on top of all your other outgoings - including any repayments you already make towards an existing mortgage.Â
If you are buying property as an investment, the lender will look at how much rent you can charge and will take this into consideration when they work out how much you can afford.
Interest rates for second-home mortgages
³§±ð³¦´Ç²Ô»å-³ó´Ç³¾±ðÌýmortgage interest rates tend to be higher than those on standard mortgage deals. But the higher your deposit, the lower your loan-to-value ratio which means you'll be able to access better rates.
You also need to choose the type of interest rate you want. For instance, are you looking for a fixed-rate mortgage or a variable-rate mortgage? You also need to consider the length of the mortgage. Twenty-five years is standard, but if you can afford to pay it off more quickly, you should pay less interest overall.Â
You can work out how much you can borrow using our mortgage affordability calculator. If you need help, you can also contact a mortgage broker to get an idea of which deals you are likely to be offered.Â
Stamp duty for second homes
Second homebuyers in England and Northern Ireland with properties over £40,000 pay a second home surcharge of 3%, in Scotland it's 6%, and in Wales you pay 4%
The total amount of Stamp Duty payable depends on the price of the property you buy. To find out exactly how much Stamp Duty you'll need to pay for your second home, use our Stamp Duty calculator.
The table below shows the amount payable in England and Northern Ireland depending on what price band your property is in.
| Property price | Main home Stamp Duty | Second home Stamp Duty |
|---|---|---|
| £0 - £125,000 | 0% | 3% |
| £125,001 - £250,000 | 0% | 3% |
| £250,001 - £925,000 | 5% | 8% |
| £925,001 - £1.5million | 10% | 13% |
| Over £1.5million | 12% | 15% |
Second home mortgage FAQs
Can I use any mortgage for my second home?
No, you’ll need a second-home mortgage, and the type required will depend on what you intend to do with the property. If you want to let it out, you’ll need a holiday-let or buy-to-let mortgage. If it’s a second home for your family, you should be able to get a second residential mortgage. Either way, lenders have different rules, so read the terms carefully before you apply.
Why are interest rates for second-home mortgages more expensive?
When you have more than one mortgage, you are considered a greater risk than someone who only has one loan to pay. This is reflected in the higher second-home mortgage interest rates charged by lenders. However, the higher the deposit you can raise, the better the deals you will be able to access.
What if I already own my own home outright?
Lenders will usually treat your application as a second mortgage application, so check the lender you choose offers second-home mortgages before applying. You might not pay such a high interest rate as you would if you were making repayments on a first mortgage. And you may also have other options, such as remortgaging your first home to release equity to buy a second property outright. You’ll still have to pay second-home Stamp Duty rates, though.
Could I get a joint second mortgage?
Yes, you can get a joint mortgage for a second home. In that respect, they are the same as standard homebuyer mortgages.
Can I get a mortgage to buy a third property?
Yes, the same rules apply if you buy three or more properties, although some lenders have rules around the maximum number of mortgages you can have at any one time. The affordability criteria will also become even more stringent if you are paying several mortgages at once.
Can I use Help to Buy for a second property?
No, you can only use Help to Buy for a property that will be your only home and that you plan to live in yourself.
Is it hard to get a mortgage on a second property?
The process is similar to taking out a standard mortgage, but with tighter affordability rules. As there is also a smaller pool of providers that offer second-home mortgages, you may need to shop or work with a broker to maximise your chances of being accepted.
What is the minimum deposit for a second mortgage?
For a second residential mortgage, most lenders require you to have at least 20% saved up to qualify. Buy-to-let mortgages, meanwhile, typically require a minimum of 25%, and holiday-let mortgages may need you to put in as much as 30% deposit.
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