How many mortgages can I have at one time?
Published 16th August 2017
There's loads of reasons why someone would want more than one property, whether investing in buy to lets, a holiday home, or maybe a second property for family to live in. Whatever the reason, if you’re wondering about how many mortgages you can have then the answer, in short, is:
As many as you want! (so long as you meet certain criteria). This does also depend on which type of mortgage you're applying for - Main residence, Buy to let, or commercial.
Even if you've been declined by a lender like Andy in this enquiry, the main thing to remember is that every lender is different. Just because you may have been declined for a second mortgage with one, doesn’t mean it can’t be done.
If you’re looking for another mortgage and want the the best deal, help is at hand so make an enquiry and have an expert establish exactly what you can do.
Landlords and multiple property owners love the advisors we work with because:
- Whole of market | with access to direct and broker exclusive products for second homes and landlords.
- Impartial | giving you the best advice for you, not what's best for someone else.
- Experienced | all advisers are highly trained and fully qualified, with a wealth of experience in arranging additional mortgages for all types of application.
One of the main factors to consider is the type of new mortgage you want. Each application and lender criteria will be different for each. Some lenders don’t offer second home mortgages, some restrict the amount you can borrow if buying property for a relative to live in, some don’t approve multiple mortgages at all, some restrict the number of properties in your portfolio if you’re looking for a buy to let etc. etc. BUT – nearly always there’s a lender that will do what you’re looking for.
Any lender will be looking to ensure you can:
Afford the new mortgage ON TOP of your existing mortgages. By calculating if any buy to let properties in the background are self-sufficient or not (this usually means rental covering the mortgage by anywhere from 100-150% - depending on the lender), and any second residential mortgages are adequately covered by employment income.
- Ensure you are credit worthy in terms of score A credit score is carried out by almost all lenders, and you'll need to pass to be approved. Some lenders have a much lower threshold than others, and others don't have a scoring system at all - judging each application case by case. If you've had credit issues in the past, then several lenders offer more flexible policy whilst still offering affordable rates.
- Ensure the risk and exposure is not too high Like what happened with Andy in the enquiry mentioned above, some lenders will limit their exposure to risk by restricting the number of mortgages a single borrower can have with them. This sometimes also includes restricting the amount of lending on a particular block of flats or number of properties in the same street, even if you are only buying one of them - for instance, if Halifax owns mortgages on 5 of 10 properties in a row to separate individuals, they may not lend to a 6th person.
- Ensure you are buying with the right intent Sometimes illegally, people buy properties on residential mortgages with the intention of letting it out from day 1 – because residential purchases can be done with 10% deposit and most buy to lets require 20-25%. Also, vice versa – some borrowers take out a buy to let mortgage on a property they intend to live in, so they don’t have to prove their income). This is clearly against the rules and more and more lenders are cracking down on it, enforcing stricter underwriting.
For this reason, having additional criteria to meet often makes getting an additional mortgage (whether that’s your second or your twentieth) slightly harder. But not impossible. In fact, arranging this type of mortgage where the criteria is tight and applicants find lenders are turning them down, is what the advisors we work with are best at! Before putting offers in on property, having the best mortgage options provided and explained to you clearly could make the process a lot easier, not to mention save you money by making sure you have the best deal.
How do I apply?
The enquiry form link below works specifically for those wanting to find out if they are eligible for another mortgage. Enter your details and one of the experienced advisers will get back to you as soon as possible.
How many Buy to Let mortgages can I have?
“How many buy to let mortgages can you have?” is a common multiple mortgage enquiry and we get them regularly. To put it simply, some lenders allow you to have one or two, and with others there is no set limit.
On occasion, lenders view landlords with multiple properties in the same location as risky, because a downturn in that specific area would affect the rental attractiveness of the properties and ultimately increase the likelihood of their loan not being repaid. But, as a whole if you can come up with the deposit and the rental income covers the mortgage adequately, then a lender will consider it.
So what rental income is required?
Again every lender is different and there’s a range of changing criteria. Some lenders ask for 150% rental coverage over the mortgage payments (so if the mortgage is £100pm, the rental income needs to be £150), while others may request only 125% coverage. Each lender also calculates this differently, where some use the ‘mortgage payment' as being exactly that - whatever rate the actual monthly mortgage payments will be based on, and others calculate it using a nominal rate of say 6% or 7% etc… The way this is worked out can have a huge impact on the maximum you can borrow.
For example, A customer wants to borrow £50,000 on a buy to let mortgage. 'Lender A' has criteria where the rental income must cover the mortgage payments by 150% when the borrowing is calculated @ a 4% interest rate (so monthly payment = £167). 'Lender B' uses 125% and a nominal rate of 6% (monthly payment = £250). The rental income would therefore need to be £250 to satisfy affordability for lender A, and £313 for Lender B.
A big difference, and if you didn’t search the whole market then you could find yourself compromising your plans or not proceeding altogether. Finding the right mortgage is often essential when considering your options and what’s right for you and your investment.
If what you are trying to borrow on a buy to let is not enough for what you need, then some shopping around is required. If there’s still an issue and you are an experienced landlord, then it’s worth considering a lender that may even allow you to offset income from other property against this into the calculations, if a property doesn’t quite fit (at underwriter’s discretion).
The number of buy to let (BTL) products available dropped back in 2008/2009 when the economic crisis really dug in, however in the recent months we have had a rise in interest as the market is seeing a huge resurgence. This is in part due to lower house prices, increased rents and better mortgage deals, not only making it more attractive to investors and first time landlords, but also making it easier to secure a Buy to Let mortgage.
Borrowing with no proof of income
Borrowers with multiple buy to lets can now borrow based purely on the rental income, and if sufficient, are not required to prove any personal income at all. New time landlords usually have a harder time of it as they usually need to meet minimum income requirements (although there are a couple of lenders with very low thresholds, that are being reduced all the time as lenders continue to do well and their criteria relaxes).
What is the maximum number of main residences I can have?
People looking for 2 residential mortgages will usually only be able to class one of the properties as a ‘main residence’, and so will need to justify why they are having 2 homes on residential rates. Residential mortgages are often the cheapest available compared to buy to lets so for this reason, as mentioned earlier, lenders will want to know they aren’t being lied to and lending a residential mortgage to someone with the intent to let it out.
It is possible, however, to have 2 residential mortgages (2 is usually the limit unless the previous lenders have agreed ‘consent to let’ and they are being let out), for instance if you work away and are buying a property to live in on weekdays, or maybe are buying near family and still want to keep the 2 properties.
The difference with applying for a residential mortgage is down to how a lender will calculate what you can borrow. They will take the monthly payments for all residential mortgages and the shortfalls on buy to lets as commitments, and then deduct this in the affordability calculation when working out what you can mortgage for with your second home. Whereas with a buy to let application, often lenders aren’t interested in what the other properties are doing, so long as this investment is sound.
Consent to let
This is where you agree with your lender to leave your main residence and rent it out, without changing the mortgage to a buy to let, keeping it on the residential mortgage. It is in no way guaranteed, and the lender is not obliged to agree, but the majority of the time this permission is granted, as long as the owners continue to keep up with payments. To apply for consent to let you can contact your lender directly, or have one of the advisors help you through the process.
Holiday Home Second Mortgages
If you own a property already and are looking to buy a holiday home elsewhere in the country, it may be possible to do so with another residential mortgage rather than incurring the additional costs of a commercial deal. Not all lenders accommodate this, and for those that do the criteria changes depending on how often the property will go unoccupied, and if you plan to rent it out to third parties or not. If you do plan to rent it out, then it's possible, but certain lenders place restrictions on the maximum amount of time you can do this (often 3 months of the year). Not all lenders are happy to consider these applications the nature of holiday rents is the often inconsistent rental income, and the effect this may have on your ability to repay the loan.
All the advisors working with us have access to the whole market, including lenders that specialise in holiday home mortgages, so make an enquiry and we'll put you in touch with the experts.
How Many Mortgages can I have on one Property?
We're often asked the question "can I have two mortgages on one home?" or "can two people have seperate mortgages on one single property"?
The problem in this situation is that both mortgage lenders will want to have first charge on the property and only one of them will be able to have it. Usually the question arises as a result of a very unusual or complex set of circumstances. I recommend you make an enquiry or give us a call - it really will entirely depend on your personal circumstances and a definitive answer is very hard to provide online.
Multiple Commercial Mortgages
Commercial mortgages are available for businesses to purchase the properties they work in or trade from, and are also available for commercial landlords to purchase property for rent to other businesses.
Often, commercial mortgages require higher deposits when compared to residential and buy to lets, with usually a minimum of 25-30% although willing lenders at that deposit level are often hard to come by with criteria being quite stringent of recent times, and it does depend on the sector your business is part of.
If you are looking to take out another or multiple commercial deals simultaneously, then affordability and serviceability of the new investment must be evidenced. You’ll be required to demonstrate the necessary expertise and experience in the sector and business you conduct, in order to prove the loan is viable and serviceable long term.
If you are planning to be (or are already) a commercial landlord looking for a mortgage on a new property, you’ll need to show your business is in a position to meet the repayments even if the property is empty. Lenders are well aware commercial properties can remain empty for much longer than residential and buy to let’s, so with them comes higher risk. As such, if you are purchasing as a business you’ll need to show you can afford the property in the event it is unoccupied.
For more information on commercial mortgages visit our commercial pages here.
How do I apply?
If you're ready to make an application or if you just have an enquiry, please fill out our quick form below and an expert will be in touch ASAP. If you require help immediate assistance please give us a call.