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By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 11th November 2020*

Whether you’re ready to upsize from your first home to a larger property or are looking to relocate somewhere new, read on to learn what to expect when looking for a mortgage as a second time buyer.

In this article we will cover:

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What is a second time buyer mortgage?

If you have previously owned a home but do not any longer, or have a mortgage at the moment, you may be classed as a second-time buyer if you’re in the market for property.

Moreover, some lenders may view people who haven’t had a mortgage for three years or more as first-time buyers.

To find out how a lender might view your own circumstances, talk to an expert. The advisors we work with are experienced in second-time buyer mortgages and can determine what your options might be. Call us on 0808 189 2301 or make an enquiry online.

Mortgage options for second time home buyers

As a second time buyer you have several different options to help you secure the right mortgage.

Take advantage of government schemes

The government’s Help to Buy scheme isn’t only for first-time buyers. If you’re considering purchasing a newly-built home, the Help to Buy scheme could be for you.

The scheme allows you to borrow 20% of the total purchase price interest-free for the first five years. To be eligible you would need at least 5% deposit. In London, you can borrow up to 40% of the purchase price. To qualify, the property purchase price must not exceed £600,000.

The government’s Help to Buy scheme is due to end in 2023 and will only be available for first-time buyers from 2021.

Port your current mortgage

If you are happy with the terms of your current mortgage, you may be able to port it to purchase your next home.

Porting the current mortgage on your old home allows you to apply your current mortgage to your new home. Doing this may mean you can retain your interest rate instead of having to risk taking on a higher rate.

Although this idea may appear to be a good shortcut to getting things moving faster, you should expect your lender to review your current circumstances to decide whether the option is possible. With many lenders, porting your mortgage is almost the same as making a brand new mortgage application.

Often, it’s only possible to port fixed-rate mortgages but it’s worth checking with your mortgage lender.

If your lender agrees to port your mortgage, you should expect fees to be applied.

Remortgage your current property to release equity

Provided you have enough equity in your current property and you intend to keep your original property, you could consider remortgaging to release equity as a deposit towards your second-time buyer mortgage.

Whether you’re maintaining mortgages for two properties or are increasing the sum you borrow against your mortgage, most lenders will need to be sure you can afford the higher payments from your income alone.

Switch to a let to buy mortgage

If you want to buy a new property and keep your current property to rent out, a let to buy mortgage might be a good route for you. If this sounds like a good option, see our let to buy mortgages guide for more information.

What loan to value mortgage can I expect as a second time home buyer?

As a first-time buyer you might have had a wealth of schemes and incentives to help get you started on the property ladder. As a 2nd time home buyer there are various options open to you.

Can I get a 95% second-time buyer mortgage?

Yes, many lenders will offer second-time buyers a 95% mortgage. You should find that your history of having previously had a mortgage makes it easier for you to secure the mortgage you want. It can, in fact, be easier due to having a track record of making mortgage payments.

How do I get a 5% deposit mortgage as a second-time buyer?

Most lenders will accept a 5% deposit from people who want to secure a second-time buyer mortgage, under the right circumstances.

If you only have the minimum amount of deposit available, many mortgage providers will expect you to have clean credit, earn your income from a PAYE salary and they might be cautious of lending to if the term of the mortgage runs into your retirement years.

That said, the advisors we work with are whole of market and they have access to lenders who consider applications from second-time buyers with bad credit, mortgages for the self-employed or complex income, and even those who are retired.

If you have 10% available as a deposit, you’ll find most lenders will offer more competitive rates. If you are able to offer 20% or anything higher as a deposit against your next property the rate you can expect will be even more attractive.

It’s worth investigating possible options to increase the potential deposit you can offer.

What sort of mortgage deals are there for second-time home buyers?

As we touched on above, the mortgage schemes available to you as a 2nd time home buyer may seem limited when compared to what you might have been offered as a first-time buyer, but it’s still worth shopping around for potential deals.

It’s important to remember that the bigger your deposit the better the deal you’re likely to receive, but even without a large deposit, you could still find a good deal to suit you.

Mortgage lenders change their offerings regularly so it’s worth talking to an expert advisor who will be able to tell you about the kind of offer currently available which you may be able to benefit from.

If you wish to discuss possible options, talk to an expert. The mortgage brokers we work with are experienced across the whole market and ready to give advice to second time buyers.

Should I use a second time buyer mortgage calculator to work out what I can borrow?

As a 2nd time home buyer you can use a mortgage calculator to work out:

  • how much a mortgage might cost each month
  • how much you can borrow based on the deposit amount
  • how much you can afford and what rates you could qualify for
  • if you might qualify for a specific rate offering right now

To establish how much your mortgage might cost as a 2nd time home buyer, take a look at our mortgage repayment estimator.

Mortgage calculators can only give a rough idea of the amount you can borrow since every lender will assess customers differently but they can be a good way to get a quick look at what you might be able to borrow.

Get advice from an expert in 2nd time buyer mortgages

If you have any questions about what your mortgage options might be as you prepare to make the move as a 2nd time home buyer, and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry online.

Updated: 11th November 2020
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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 information 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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