Rules & Eligibility Requirements for Second Home Mortgage
Looking for a second home? Consult specialist brokers for second property mortgage insights, eligibility, and approval strategies
How will you be using the second property?
No impact on credit score
Why use us?
At OnlineMortgageAdvisor we know that everyone's circumstances are different. That's why we only work with expert brokers who have a proven track record in securing mortgage approvals
- Second mortgage specialists
- Higher chance of approval
- Mortgage Approval Guarantee - or £100 back*
- No impact on credit score
- We don't charge a fee
- There for you every step of the way
- Rated excellent on Trustpilot, Feefo and Google
If you have any questions,
feel free to call us on 0808 189 2301
Thinking of buying a second home? It isn’t as straightforward as buying your primary residence, but there are still plenty of finance options available – it’s just important to know the rules first. Here’s everything you need to know about buying a second property and how to get the mortgage you need.
How to get a second home mortgage
Your first step should be to make an enquiry with us so we can match you with a broker who specialises in second home mortgages. This can significantly improve your chances of securing the best possible deal.
The broker we match you with will guide you through the following steps:
- Assessing whether you should release equity from your home for the deposit
- Finding the right lenders and rates for a second home mortgage
- Helping you secure the best deal and complete your application
What are the rules and requirements for buying a second home?
People choose to buy another property for a variety of reasons, but you need to be aware of the rules before you take the plunge. There are specific regulations around what qualifies as a second home, tax implications and the type of insurance you need.
A mortgage broker who specialises in second home guidelines will be best-placed to help, but here’s a quick overview of what you can expect…
What’s classed as a second home?
A second home is essentially any other property you own that you don’t live in all the time. It could be a holiday home, for example, perhaps a property you only live in during the week, one you’ve bought for someone else or that you part-own with a family member.
Note that this only applies to residential properties. You may of course want to buy a second home purely to let it out, but this will be classed as a buy-to-let or investment property, and the legal and financial requirements will be different accordingly.
If this is the route you want to go down, you can find out more in our guide to buy-to-let mortgages.
Stamp duty implications
You’ll need to pay an additional 3% stamp duty surcharge on any additional property you own. It’s based on a tiered system, so the higher the value of the property, the more stamp duty you’ll pay. Though you won’t pay a flat rate – it’s a progressive system so you’ll only pay a percentage on each portion of the property’s value.
|Property value||Basic stamp duty rate||Plus 3% surcharge|
|Up to £250,000||0%||3%|
|£250,001 to £925,000||5%||8%|
|£925,001 to £1.5 million||10%||13%|
|Above £1.5 million||12%||15%|
Note that no stamp duty is payable on second properties worth less than £40,000.
You can use our calculator below to work out how this could look for you, based on the property you’re looking to buy:
Stamp Duty Calculator
This calculator can tell you how much Stamp Duty Land Tax you will need to pay on your property purchase, whether you're a first-time buyer, a home-mover or in the market for an investment property.
Your stamp duty to pay is:
Your effective tax rate is
Now that you've worked out how much stamp duty is payable, it's a good idea to talk to a broker about your mortgage options. Their knowledge and expertise can help you make sure you aren't paying over the odds with all costs and fees factored in.
Council tax implications may differ as well, but not always. You’ll still need to pay council tax on a second property, but some councils are able to offer a discount, the amount of which can vary. This will depend on your particular council, so you’ll need to contact them to see if a discount will be offered.
Other tax implications
Second homes will be subject to capital gains tax (CGT) when they’re sold, but you’ll only pay tax on any growth in value. You’ll also have a CGT allowance to use, which can reduce the amount of tax you’ll need to pay. This can be a tricky area, so it’s vital to speak to an expert broker and ideally a financial adviser who can offer more support.
Rules around insurance
You likely won’t be eligible for standard home insurance, largely because you may be leaving your property unoccupied for long periods – most insurers will only allow the property to be unoccupied for a maximum of 30 days – and so will need a specialist policy to suit your needs.
Speak to a second mortgage expert
Maximise your chance of approval with a dedicated specialist broker
We're so confident in our service, we guarantee it.
We know it's important for you to have complete confidence in our service, and trust that you're getting the best chance of mortgage approval at the best available rate. We guarantee to get your mortgage approved where others can't - or we'll give you £100*
Standard eligibility requirements will be broadly similar for second home mortgages as for primary residences, but there can be differences when it comes to things like deposits. You may also be expected to specify your reasoning for wanting a second residential mortgage, so be prepared to answer some additional questions.
You’ll normally be expected to put down a bigger deposit for a second home mortgage, with maximum loan-to-values (LTVs) typically in the range of 75-80%. There are a few lenders that will go higher than this, while others set a lower maximum if you want an interest-only deal.
Many will take into account the level of equity you have in your primary residence, and some will set a combined LTV for both properties. It will often be decided on a case-by-case basis, which makes having an expert broker on your side who knows each lender’s requirements for second mortgages invaluable.
Bear in mind that your affordability profile will come into even sharper focus when buying a second home, namely because you’ll need to prove that you can afford to cover payments for two mortgages, rather than just one.
Lenders will take your existing mortgage payments and all other related costs into account before deciding whether or not they can lend to you, and their affordability checks will often be stricter. Make sure to check your credit score too, as if it’s worsened since you bought your first home it could be more difficult to be approved for a second residential mortgage.
Try our mortgage affordability calculator below to get a rough idea of how much you could borrow…
Mortgage Affordability Calculator
Our affordability calculator can tell you how much you can potentially borrow from a mortgage lender. Simply enter your total household income below and our calculator will do the rest.
You could borrow up to
Most lenders would consider letting you borrow
This is based on 4.5 times your household income, the standard calculation used by the majority of mortgage providers. To borrow more than this, you will need to use a mortgage broker to access specialist lenders.
Some lenders would consider letting you borrow
This is based on 5 times your household income, a salary multiple you might struggle to qualify for without the help of a broker. This income multiple is not widely available to customers who are applying directly with a lender.
A minority of lenders would consider letting you borrow
This is based on 6 times your household income, a salary multiple you will struggle to get without a broker. Six-times salary mortgages are usually only available under very specific circumstances.
Get Started with an expert broker to find out exactly how much you could borrow.
You’ll be more likely to be approved if you’ve got plenty of disposable income, or if you’re close to paying off your mortgage on your first property. If you’re struggling to make the repayments on your primary mortgage, you’ll likely find it very difficult to be approved for a second.
Absolute Fab: I got a mortgage as an ex-bankrupt !!!
As an ex-bankrupt with a qualified Annulment I had to take several bridging loans to cover my debt. I found Online Mortgage Advisor who offered fantastic but specific insight to my issues. Within 6 weeks we exchanged contracts and I am now debt-free, and my house is safe.
They pulled out all the stops
Great staff and good communication. Helped us understand the process and gone over and above to help in a difficult situation. Other companies couldn't even be bothered but Thank you so much!
Anneke Woolley, 12 days ago
Our advisor was amazing from the start!
Aaron went above and beyond. He worked late and kept in contact with me and worked tirelessly to find me the best mortgage he could
James, 10 days ago
Rated 4.8 out of 5 stars across Trustpilot, Feefo and Google
Are mortgage rates different for second properties?
Take a look at our rates table below to get an idea of what deals are currently available for second home mortgages. Please note that these rates are subject to change.
Looking for more rates and deals?
We can match you with a mortgage broker who can provide you with up-to-date bespoke rates and deals from across the entire market.
Last updated October 2023
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.
Remortgaging to buy a second home
If your primary residence is mortgage-free or you have a lot of equity in it, you may be considering remortgaging it to buy a second home. This is a common way to raise capital for a new deposit and, provided you’re still able to prove affordability, shouldn’t pose too many issues.
Though again, bear in mind that these affordability checks will be tougher than if you only had a single mortgage, and if you’re going from being mortgage-free to having two home loans, it may take a bit of adjustment to work the repayments into your budget. Make sure you can, and that you can prove it to lenders.
Can you get a second mortgage with bad credit?
Yes, it’s possible. There isn’t a huge difference between getting a mortgage for a primary residence with bad credit and getting a second mortgage under the same circumstances.
In addition to affordability, a mortgage lender’s main concern in such cases will be the type of bad credit recorded on your report, the amounts involved and when this event occurred. Some lenders will also take account of why it may have happened as there may be tangible reasons for it.
If you do have bad credit this could reduce the pool of lenders willing to consider your application which can have an indirect affect on the interest rates available and the deposit requirements will likely be higher to offset the perceived risk.
Getting a second residential mortgage for a family member
This is very much possible and is a common reason people take out a second mortgage. Borrowers looking to take out a second mortgage for this purpose actually have more options as they are special types of mortgage agreement that could help you out.
If you want to help a family member get on the property ladder, you can get a second standard residential mortgage for this purpose and this would essentially work in the same way it would if you were buying a second property for yourself.
Another possibility could be getting a joint borrower, sole proprietor mortgage, provided you are happy with an arrangement that offers you less rights in terms of ownership.
Get matched with a second home mortgage specialist
Having the right broker on your side can make all the difference when you’re buying a second home, and we can put you in touch with the expert to help. Just tell us a few details and we’ll scour our extensive network of brokers to pair you up with the one who perfectly matches your requirements, all for free and with no obligation.
Get in touch today – just call us on 0808 189 2301 or make an enquiry and we’ll get started.
Speak to a second mortgage expert
Maximise your chance of approval with a dedicated specialist broker
It can be more difficult to get a mortgage on a second home, namely because of the additional affordability checks involved. That isn’t to say it’s impossible – provided you’ve got the necessary disposable income, a high enough deposit and a decent credit score, you should still be able to find the right mortgage, but be prepared for it to be a more challenging process.
Potentially. If you want to make some extra money from your property when you’re not living there yourself, you may be able to rent it out as a holiday home. However, not all residential mortgage lenders will permit this, and among those that do, you may only be able to let it out for a few weeks of the year – any more than this will require a specialist holiday let mortgage which comes with its own set of rules and implications.
Yes, it’s possible. This will depend on when the CCJ occurred and the amounts involved. So, for example, you have a better chance of having your mortgage application approved if your CCJ was for less than £100 and it occurred over three years ago than if it was, say, over £500 and was only registered on your credit record six months ago.
Ask us a question
We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in second home mortgages.
Ask us a question and we'll get the best expert to help.
Get in touch today
Make an enquiry and we'll arrange for an experienced mortgage broker we work with to contact you straight away.