We get lots of enquiries from people who want to know where to get a mortgage for a second home, or who’ve already tried and struggled to get approved.
As you probably know, there are numerous lenders, all with different criteria. There’s no best bank for a second home mortgage - it all depends on your unique circumstances.
That said, it’s good to have an idea about the various second home mortgage providers and how they differ in their approaches. For example, some are picky when it comes to adverse credit, some are stricter on self employed people, and others are harder to work with if you’ve just changed jobs.
The good news is that the mortgage experts we work with know the market inside out. They know the best second home mortgage lenders and help to arrange second mortgages for people like you, every day. This means they’re in the best place to guide you, whatever your unique circumstances.
Second home mortgage lenders: how they work and what you need to know
As a general rule, second mortgages require stricter terms, and less lenders offer them. This is because the additional payments required for a second mortgage are seen as a higher risk as your income will need to support 2 mortgages alongside 2 sets of running costs for the properties.
If you’re looking at a second mortgage, here’s what to expect from a lender.
Stricter affordability criteria
Lenders are likely to offer you a lower loan to value (with some insisting upon a deposit of at least 25%). Others will require you to have a minimum amount of equity in your first home (such as 15-20%).
Many lenders will ‘stress test’ your finances - looking to see that that you can cover both sets of mortgage payments and associated running costs with your current income.
A credit check
Like with your first mortgage, your credit history will come into scrutiny. A history of poor credit certainly isn’t a deal-breaker - but it may reduce the number of lenders available to you, seeing as the second mortgage market is smaller.
Lenders often want to know why you intend to buy a second property. They’ll often want proof that, after the purchase, one of the properties will remain as your main home. The case for a second home is much stronger when the lender can see the genuine need, ie avoiding a 3 hour commute by having a flat close to your employer.
What to expect from the high street lenders
Below we’ve outlined some of the better known lenders, and their current stances on second mortgages. Bear in mind there are a huge amount of lenders out there so speaking to a qualified expert is crucial to ensuring you get the right mortgage for your circumstances.
Nationwide second home mortgages
The kind of second home mortgage Nationwide offers can be used for properties in the UK and abroad. They’ll offer a maximum LTV of 85%, and also consider second homes used for work, accommodation for dependent relatives, or as your new main residence.
Nationwide won’t consider properties that are only to be used as holiday homes, ones that you plan to immediately let out or unusual properties such as timeshares or mobile homes.
Halifax second home mortgages
Halifax are happy to lend on second properties which will be used as holiday or second homes, and will accept a maximum LTV of 75%. They won’t accept Right to Buy, Guarantor applications or Builders Incentive Schemes.
Halifax allow for 1 residential and 3 ‘other properties’ in total (which include second homes and buy to let). Though they’ll allow you to let out the second home, they won’t allow letting to immediate family. Immediate family can occupy the property, provided that there’s no formal tenancy agreement.
Santander second home mortgages
Santander are happy to consider applications for second homes, and will offer a maximum LTV of 80%. However, they stipulate that the second home is for your ‘personal use’ only.
HSBC second home mortgages
HSBC offer a maximum LTV of 80% and will offer a mortgage if both loans can be paid out of your normal income. The second property can only be used by the applicant and their immediate family - HSBC don’t allow any kind of renting out of the property.
Natwest second home mortgages
Natwest will offer a 90% LTV but stipulate that your holiday home must be for ‘personal use’ only.
Get some expert help in buying your second property
Our customers consistently rate ud 5 stars on Feefo because we offer access to first-rate brokers who:
Offer the whole of market
Can help you find the best lender for your specific circumstances
Are fully OMA and LIBF accredited
If you have questions about financing for a second property 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 broker with the right expertise for your circumstances. – We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.
*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.
Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes.
The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete's presence in the industry as the 'go-to' for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!
Read more about Pete here...