Thinking of buying a second property? Whether as a holiday home, rental home, or helping out a family member, you might be thinking: can I take a second mortgage? The good news is, yes, it can be done, but there are important factors to consider, including affordability, deposit levels, and lender criteria. This FAQ answers common questions like “how do you get a second mortgage”, “how much you can borrow with a second mortgage”, and “can I get a second mortgage to buy another house UK”, helping you make an informed decision.
What Is a Second Mortgage?
A second mortgage is an additional loan against a property that you already own. There are normally two types:
Second charge mortgage – A mortgage against your current home, as well as your existing mortgage.
Second home mortgage – A regular mortgage for buying a completely different property and keeping your present one.
People naturally ask, “can you get a second mortgage?” And the answer is yes, providing that you are acceptable to the lender and can demonstrate affordability. And of course, if you ask for the right advice and guidance from a second home mortgage expert.
Can I Get a Second Mortgage to Buy Another Home?
If you are wondering, can I get a second mortgage to buy another home, the answer depends on a range of factors:
Affordability – Can you afford to make repayments on your first and second mortgage? Your mortgage will probably be the largest amount of debt that you’ll ever willingly take on, and most will not be able to afford to repay more than one mortgage. If you are looking to potentially gain a second mortgage, you need to make sure that you are in the lucky position where you can comfortably afford both mortgages.
Credit history – Having a good score makes you more eligible. If your credit score is low or you have poor credit, chances are you won’t be able to obtain one mortgage, let alone two! Credit score is extremely critical when applying for a mortgage since it establishes your credibility with regards to credit in the eyes of the lender.
Deposit – Second homes typically call for a bigger deposit from lenders. But that is purely up to the house that you are purchasing and your own circumstances.
Purpose – Buying a second home to live in, let out, or as a holiday let will affect the type of mortgage that you will be able to get.
In the UK, lenders will also be keen to understand if the second home is for personal use or investment if you are asking, can I get a second mortgage to buy another home UK. Location matters if you’re buying a second personal home. Situations in which you would be purchasing a second residential home at the end of the road from your present main residence might seem a bit dodgy to mortgage companies while a second second home on the other side of the country is sensible.
How Can I Get a Second Mortgage?
Many homeowners ask themselves, how do I get a second mortgage or where do I get a second mortgage. Here’s a step-by-step guide:
- Review your finances – Use affordability calculators and consult with a mortgage broker.
- Review your credit report – Correct errors and boost your score if needed.
- Prepare your documents – Proof of income, current debt, property details, etc.
- Shop around for lenders – Not all lenders issue second mortgages, so ask your friends or use a broker.
- Apply and have affordability checks – Lenders will verify whether you can afford to repay the two loans.
Can I Get a Second Home Mortgage?
The following will be examined by lenders to approve you for a second home mortgage:
- Income and expenditure
- Current balance of your first mortgage
- Credit history
- Reason for the second property
If you are wondering how I can get a second home mortgage, it is always best to get pre-qualified with a broker to find out what you can have.
How Much Am I Eligible for My Second Mortgage?
One of the most common questions is, how much can I take out on a second mortgage. Generally, this will be based on:\
- Your debt-to-income ratio
- Your current mortgage obligations
- Rental income (if the second property is for rental)
- Property value and size of deposit
Likewise, as with a first-home loan, the more income you can demonstrate and the less debt you carry, the more you can borrow.
How Much Deposit for Second Mortgage?
The bank will usually require a deposit of 15–25% on a second home, but this is not always so. If you are thinking, how much deposit for second mortgage, bear in mind:
More deposit = less risk for lenders
Lower LTV = better interest rates
You can use your current equity to fund the deposit if you remortgage or draw out equity
How Much a Second Mortgage Costs and Are They More Expensive?
If you are considering the cost, you are likely to ask, how much is a second mortgage and are second mortgage prices more expensive? Generally:
- Second mortgage interest is more expensive than for first mortgages since they are riskier.
- Charges may include arrangement fees, valuation charges, and solicitor fees.
- Monthly repayment will depend on interest rate, term, and amount of borrowing.
Calculating using a mortgage calculator will give an indication of your monthly repayments and a better perspective on affordability.
Can I Afford a Second Mortgage?
Something to think about is can I afford a second mortgage? Have a realistic look at your finances:
- Account for all ongoing costs: council tax, insurance, maintenance, and potential void periods (if renting)
- Cover changes in interest rates or income
- Always leave a financial buffer
Acting wisely now will prevent financial anxiety in the future.
How Quickly Can You Obtain a Second Mortgage?
If you are recently mortgaged, you may be wondering, how long can you get a second mortgage. There is no specific rule, but the majority of lenders would prefer that you have had your first mortgage for 6–12 months or more before applying for a second.
But if you are well-off in regard to income and equity, some lenders will approve your application sooner.
FAQs
Q: Can you get a second mortgage on your property?
A: Yes. As long as you have enough equity and meet lender affordability checks, you can borrow on your current home using a second charge mortgage.
Q: Can I get a mortgage on a second home if I already have one?
A: Yes. This is a very common scenario for holiday home purchasers and buy-to-let investors.
Q: How much higher are second mortgages compared to first mortgages?
A: Second mortgage interest rates can be 1–2% higher on average, depending upon your position and who you borrow from.
Q: Is it possible to have a second mortgage and still rent out the second house?
A: Yes, although you will likely need a special buy-to-let or let-to-buy mortgage based on your situation.
Conclusion
Should you have been asking, can I get a second mortgage, the answer is yes, but only with planning. Whether you are considering second home mortgage options or merely wanting to know how much can I borrow on a second mortgage, always consult with a mortgage adviser to consider the best course of action. From finding out what is a second mortgage to working out how much deposit on a second mortgage, having your facts right will put you in the best possible place to go on and do it confidently.
