Second Home Mortgage Rates

If you’re considering getting a second home mortgage and want to know more about current interest rates, we outline why things are different, how to find the best deals, and which mortgage lenders are offering what right now.

You might find it helpful to read our article on what qualifies as a second home.

What is the current interest rate for a second home mortgage?

Mortgage rates on second homes aren’t usually any higher than those for primary residence mortgages. With this in mind, you should expect the best deals with an interest rate between 0.25%-0.5% above the Bank of England base rate.

Under some circumstances, though, they could reach much higher, but this is not precisely because the property you’re buying is a second home. Apart from the eligibility criteria, rates will be determined by your intentions for your second home. Buy-to-lets, holiday lets, and commercial properties will need a specific type of mortgage.

The Bank of England’s base rate decisions directly affect both tracker and standard variable rate mortgages, which can fluctuate in accordance. Fixed rates avoid this uncertainty, but there’s the risk you could lock in too high if the base rate starts to come back down during the term of your deal.

Are the rates always higher for second homes?

Generally, no, you will find that you’ll likely be charged the same rate of interest if you have a second home mortgage compared to a primary one. While the exact rate offered will be at the discretion of the lender and based on the criteria that are typically used for a standard mortgage, too (the loan-to-value ratio, your credit rating, age, income and affordability, and the type of property you’re looking at), the only thing that’s likely to be higher is the deposit requirement.

Why is this the case?

It comes down to that overriding benchmark, which is ‘risk’. Lenders will always take steps to protect themselves from any potential loss in investing their money in your mortgage. Taking on another substantial loan, and the huge long-term commitment and extra cost that comes with it, could be risky. Asking for a bigger deposit on your repayments ensures they make gains on that loan from the outset, minimising their losses should the worst happen down the line.

Of course, there are ways to convince a lender that you’re a credible and reliable borrower by having a large amount of equity in your first home, putting down a robust deposit and putting together a strong application, which will always make you a more attractive borrower. An experienced broker, like the ones we work with, can help you.

How to compare second home mortgage deals

When it comes to buying a second home that needs mortgaging, it’s wise to make sure your first port of call is to find a reliable mortgage broker. Ultimately, the crucial second home mortgage rates you’ll secure will almost certainly be more favourable if you work with an advisor who knows where the best deals are and has access to them, which are the most amenable lenders, and what they’re likely to stretch to for a borrower like you.

Many factors will determine what kind of rates you’ll get, but research will need to be meticulous, precise, and detailed to find the best ones. There are comparison sites out there that might give you a ballpark figure; however, it’s very unlikely you will find the exact rate you’ll end up with there, making it impossible to calculate definite repayments for budgeting.

Which lenders are offering the best deals at the moment?

Look at our rates table below to get a rough idea of the current deals available for second home mortgages.

Please note that the above rates were accurate at the time of writing, but are always subject to change at the lender’s discretion. Speaking to a mortgage broker is the best way to find the most up-to-date deals.

Get matched with a second home mortgage specialist

The specialist brokers we work with understand the complexities of getting a mortgage on a second home and that good interest rates on one can be hard to determine and even tricker to secure.

We work to match you with an advisor who suits your unique circumstances. We are aware that individual mortgages and applications have a direct effect on interest rates and, ultimately, your long-term financial commitment. Contact us today at 0330 818 7026 for a free consultation to get the ball rolling, or make an online enquiry.