How Many Mortgages Can You Have?

There are many reasons why you might want more than one mortgage. Some of the most common ones are to buy a holiday home, carry out home improvements on your current residence, or invest in a buy-to-let.

There’s no fixed answer if you’re wondering how many mortgages you can have. It will depend on the type of mortgage you’re seeking and your circumstances, as we’ll explain in this article.

How many residential mortgages can you have?

It’s possible to have multiple mortgages, commonly for property investments or buying second homes. Lenders will assess your income, credit history, and equity in current properties. Ensure you’re prepared for the extra payments and understand lenders’ varying criteria.

So, if you want to buy a second home or a holiday home abroad, you’ll need to find a lender who agrees that you can afford to own multiple homes. Unfortunately, it can be challenging to prove that your finances will cover the repayments for a second mortgage, let alone a third. You can find out more in our guide to second-home mortgages.

Note that most residential mortgages do not allow you to let your property commercially. So, if you’re expecting to let out your second home or holiday home some of the time and use that money to help you repay your mortgage, you’ll probably need an investment mortgage instead.

Remember, you will have to pay an additional surcharge on top of the stamp duty you normally pay on your primary residence. As an example, if your house is valued at up to £250,000 you’ll have to pay a 5% surcharge instead of not paying stamp duty if it was your primary residence.

For more information, see our article on stamp duty for second homes.

Can you have multiple mortgages on one property?

Yes. If you already have one mortgage secured on your home and want another, this is called a second-charge mortgage. These are usually used to finance home improvements, consolidate debts, or meet short-term capital requirements. Our guide to second-charge mortgages provides all the details.

In brief, a second charge mortgage is a loan secured on the same property as your original mortgage, provided by a different lender. If you were to get a further loan secured on the same property (which is less common but still possible), this would be a third-charge mortgage.

The terms ‘second charge’ and ‘third charge’ relate to the priority of repayment in default situations. If your home had to be sold to pay your debts, your original lender (as the provider of the ‘first charge’ mortgage) would have the highest priority claim on the proceeds, followed by your second charge lender and then, if you have a third mortgage on the property, your third charge lender.

Can they be with different lenders?

Yes, if you secure multiple mortgages on the same property, these are typically provided by different lenders. You would have your original mortgage with one lender, your second charge mortgage with another lender, etc.

If you seek additional borrowing from your existing lender, they wouldn’t usually provide it as an extra mortgage. Instead, you would apply to remortgage to increase your borrowing. Your lender would assess whether you can afford to do so and whether your reason for doing so is acceptable within their policy.

If you’re applying for multiple mortgages for multiple properties, it’s up to you whether you do this with the same or different lenders. Bear in mind that, either way, you’ll need to disclose the details of all the properties you currently own and are in the process of buying, and each lender will assess affordability on this basis.

How to get approved for multiple mortgages

Getting approved for multiple mortgages can often be harder than getting approved for the first one. Before applying for a new mortgage, we recommend taking the following actions.

Seek expert advice

If you’re hoping to buy a second home, seek advice from an expert on how likely you will be approved based on your current financial situation and existing mortgage. This will prevent any black marks on your credit report due to declined applications.

If you’re looking for a second-charge mortgage, you should first discuss your plans with a broker to ensure that this is a better option for you than remortgaging. Each has pros and cons. If you need help finding the right broker, get in touch.

Consider your borrowing capacity.

Most lenders judge how much you can afford to borrow in total by multiplying your annual income by a set figure. This is called the ‘maximum income multiple’ and it varies between lenders, typically within the range between four and 5.5, but can sometimes be higher.

If the outstanding balance on your existing mortgage is more than four times your income, it could be difficult to borrow more. If your outstanding balance is three times your income, you might be able to get a new mortgage for two times your income or maybe even 2.5. Note that you must also meet any other criteria the lender sets.

Check your credit report

Lenders will run a full credit check before approving a second mortgage, so it’s best to know what they’ll find in advance. If you’re applying for a second mortgage to consolidate debts, these debts may have impacted your credit score. If you have any concerns about credit issues and how they’ll affect your application, discuss these with your broker.

You can download your credit reports to check your credit record before you apply for another mortgage.

Complete your application carefully

Applications for second home mortgages and second charge mortgages are closely scrutinised, as both are seen to carry more risk than a standard mortgage. Every detail will be checked for veracity.

Your broker will ensure that all of your paperwork has been completed correctly and catch any unintentional errors that could be flagged as fraud. It’s crucial to accurately report details of your income, current debts, and planned usage of the property you’re buying, as these will all be important factors in approval or refusal.

How many investment mortgages can you have?

It is easier to get multiple investment property mortgages (e.g. buy-to-let mortgages and holiday let mortgages) than residential mortgages because each property generates an income of its own.

You won’t need to prove that you can afford both your residential mortgage and your investment mortgage from your income. Instead, each investment mortgage will be assessed based on the expected rental income of that property. Your personal income will still be factored into affordability calculations, but the expected rental income is the most important element.

Many investors have multiple holiday let, buy-to-let, or commercial mortgages.

Once you own three or more investment properties, you might consider applying for a portfolio mortgage that covers all the properties under one loan rather than managing and paying off multiple mortgages at once. Read more in our guide to portfolio mortgages.

Get matched with a mortgage broker experienced in these cases

It’s important to find the right broker for your situation. Whether you’re buying a second home, getting a second charge mortgage for your current home, or buying an investment property, you’ll want to work with a specialist in the relevant mortgage type who understands the market and can give you expert advice.

We work with numerous mortgage brokers with different areas of expertise and offer a free matching service to connect you with someone who can help. To try it, just call us on 0330 818 7026 or fill out this form.