Second Home Mortgage Calculators

If you’re looking into second home mortgages and are wondering how much you can afford first, it makes sense to research and start your budgeting with our specialist calculators.

While they can’t replace a fully-informed broker having access to very specific likely cost scenarios, they are useful to get those all-important initial estimate figures to get you started on your mortgage application.

Here we provide more information on how much you might be able to borrow for your ideal second home.

How much can you borrow for a second home?

This will depend on your income and financial circumstances as a whole. Of the lenders out there who are willing to offer mortgages on second homes, the majority are far more focussed on how well you are able to afford the loan, rather than caps on how much.

So, while they’ll still work out affordability on salary multiples – usually about 4.5x times or 5 times your annual salary – the deal breaker will always be whether you can comfortably afford repayments on both a first and second mortgage, which you will have to prove in your application. Some will even stretch to 6x income multiple for attractive borrowers. For example, HSBC stipulates that loans will be considered ‘if both loans can be serviced entirely from an applicant’s salary, subject to normal credit assessments’.

Calculate your maximum borrowing

You can get a better idea of how much you might be able to afford with a second home mortgage in our calculator, but please note, this is for guidance only. A broker who specialises in second home mortgages, like the ones we work with, can help you to determine figures more precisely.

It’s also worth bearing in mind that your existing mortgage commitments will also be factored into the lender’s affordability assessment. If the repayments and other fixed expenses on your primary residence are high, this could reduce the amount you’re able to borrow.

Other borrowing conditions

All lenders are different and implement their own framework when it comes to granting loans. There are some who will have further restrictions for second mortgages in order to mitigate risk, such as Newbury Building Society, which insists that the second property’s price does not exceed the first. Stafford Railway Building Society will only lend to people with a minimum income of £40,000, and Harpenden Building Society has a minimum loan cap of £75,000 and a maximum of £2m.

How much deposit you will need

The majority of willing lenders are willing to provide a loan-to-value (LTV) ratio of 75%, requiring a 25% deposit from the borrower for a sale to be feasible. The likes of Virgin Money and Halifax have previously said this is based on whether the customer is able to afford all credit commitments, including any other mortgage you might have.

You can read more about deposit requirements in our guide to second home mortgages.

How a broker can help you navigate the second mortgage market

As we are exploring here, there are no hard and fast rules when looking for a second mortgage, so understanding exactly how much you can afford and what deals are available to you is almost impossible to ascertain at the planning stages.

Finding an experienced broker in this field should be the first step you take in this process because they have advanced knowledge and access to a marketplace that is constantly fluctuating and involves many variations of lender practices.

What your mortgage payments will look like

Understanding what your monthly repayments might be, taking into account type of mortgage, length of term and interest rates, can help you to budget.

To help you get a ballpark sum in mind, use our repayments calculator here.

What if you’re releasing equity to buy a second home?

If the sums add up so that you have enough equity in your first home to put towards a second, releasing it to finance this move might be possible. Again, it will all come down to convincing a lender that you are able to afford both loans without a struggle.

Some lenders may want to know how you intend to use the second property in order to sanction this move, with popular scenarios being investing in a buy-to-let or commercial property, or buying a holiday home. See our guide to remortgaging to buy another property for more information.

Get a better idea of what your repayments might look like if you’re taking this financing method by using our equity release calculator.

Get matched with a second home mortgage specialist

While our calculators are a great starting point when starting to budget towards a second home, and they will give you the insight you need to determine whether another mortgage is feasible, we can help get you to the next phase in your forecasting – whether it’s a realistic move for you, how to put together a strong application, and getting access to the right lenders and deals.

That’s where our matching service comes in. We will know which kind of specialist broker to introduce you to for your unique circumstances, knowing that, because we only work with fully trained five-star rated experts, their reliable, honest and impartial advice will give you the greatest chance of success. For an initial free chat, contact us on 0808 189 2301 or make a quick online enquiry today.