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Second home mortgage calculator

The key information you need to know about second home mortgage calculators.

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By Pete Mugleston   Mortgage Advisor

Last updated: 25th April 2019 *

We get lots of enquiries from people who want to understand exactly how a second home mortgage calculator works in the UK and what information can be gleaned from them.

To answer these questions we’ve put together a comprehensive guide to 2nd home mortgage calculators where we will cover:  

Once you’ve read through the details below, if you’d like to know more about a mortgage for a second home and how a calculator can help you; make an enquiry so we can arrange for an advisor we work with to contact you directly.

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What is a second home mortgage calculator?

A mortgage calculator for a second home is a tool that can be used by either a mortgage lender or advisor in order to work out how much you may be able to borrow and to give an indication as to what the repayments will be for the amount you need to borrow on a second home mortgage.

Whilst all lenders will use their own calculator based on their specific in-house requirements, the good news is, such tools are not exclusive to mortgage providers.

You can find 2nd home mortgage calculators on many UK lenders’ or other online mortgage websites - but keep in mind that they will only give you a rough idea about how much you can borrow and the potential rates on offer.

How does a second property mortgage calculator work?

If you’re looking to purchase a second home using a mortgage, it’s likely a lender will use a higher degree of scrutiny when assessing your application. A lender will want to establish that a second mortgage will not impinge upon your ability to repay your first mortgage and vice versa.

When using a second mortgage calculator to work out what you may be able to borrow for a second home, most will ask you for the following information:

  • What you’re using the second property for
  • Purchase price of the second property
  • Size of deposit
  • Your income and outgoings
  • Mortgage term
  • How far away from your main residential is the second property?

When looking for a mortgage on a second home, if you use a calculator on a lender’s website it will usually be programmed in line with that lender’s in-house affordability criteria.

As each lender’s affordability criteria will vary, this may produce a range of different results based on the information you provide.

This is where we can help. The advisors we work with adopt a ‘whole of market’ approach and, therefore, will be able to identify which 2nd property mortgage calculators used by lenders offer the most favourable terms. If you get in touch we can arrange for an expert to contact you.

How do I calculate the amount I can borrow on a 2nd home mortgage?

Yes, it will certainly give you an indication of the amount a lender may allow you to borrow. However, each lender will want to conduct their own affordability assessment as part of your application before confirming what this amount will be.

As with first mortgages, a lender’s in-house second mortgage calculator will usually give an indication based on a multiple of your income.

Most lenders will use 4.5x your salary, some may go up to 5x your salary and a few will go even higher in certain circumstances.

The table below illustrates how this may look:

Total Income 4.5 x Income 5 x Income 6 x Income
£20,000 £90,000 £100,000 £120,000
£40,000 £180,000 £200,000 £240,000
£60,000 £270,000 £300,000 £360,000
£80,000 £360,000 £400,000 £480,000
£100,000 £450,000 £500,000 £600,000

The key difference for a second mortgage is that as part of this process your first mortgage will also be taken into consideration in order for a lender to be confident you can afford both.

If you make an enquiry with us we will ask an expert to contact you and look at your own circumstances to help you assess what you may be able to afford for a second mortgage.

How do I calculate the interest payments on a second home mortgage?

A second home mortgage calculator will certainly be able to give you an indication of how much interest you will pay and most calculators will allow you to input your own rates.

However, because every lender will have a number of different offers and deals across a range of different types of mortgage lending it’s difficult to be completely accurate as you may opt for a deal with a different rate than the one used by the calculator to work out your payments.

To give you an idea of the type of information a mortgage calculator can show you, the table below illustrates what you may pay back overall when buying a second house using a number of different interest rates, based on borrowing £100,000 over 25 years:

Interest Rate Monthly Payment Percentage
2% £424 £127,179
3% £474 £142,239
4% £528 £158,284
4.5% £556 £166,684

How do I calculate the amount of deposit I’ll need for a second home mortgage?

Yes, a second home mortgage calculator will be able to show you how much deposit you may require. As mentioned previously, most lender’s in-house tools have pre-set parameters that will indicate when you have inputted a deposit amount that is insufficient for the type of lending you require.

Most lenders will require a more substantial deposit (typically up to 25%) than for a first mortgage in order to satisfy their internal affordability criteria. It is also not unusual for lenders to scrutinise how much equity is in your main residence when considering your application for a second mortgage.

Some lenders may want to see at least 15-20% equity in your main residence, however, a few may not take this into account as long as you have at least 10-15% deposit available for your second property purchase.

If you have sufficient equity in your main residence, some lenders may also allow you to use this equity to cover the deposit you require for your second home mortgage.

There are a lot of different options available to you, so why not let us help you in this process?

If you make an enquiry we will arrange for an expert to contact you directly.

How can I find a reliable second home mortgage calculator online?

If you’re looking to buy a second house and want to use a mortgage calculator you can find one on most lender’s websites and major financial hubs.

However, as all mortgage lenders use different criteria in the UK, the calculators they use will be tailored accordingly.

Speak to an expert on second home mortgages

Relying solely on a mortgage calculator when looking to buy a second home is not recommended.

Lots of people in your situation should seek professional advice from one of the expert brokers we work with to assist them before making a final decision.

If you have questions and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0800 304 7880 or make an enquiry here.

Then sit back and let us do all the hard work in finding the mortgage advisor with the right expertise for your circumstances.

Updated: 25th April 2019
OnlineMortgageAdvisor 2019 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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