How to get a second mortgage to buy another house

Known for being more difficult to obtain than a first mortgage, an applicant must meet a strict set of criteria to qualify for a second home mortgage.

To help you decide whether a getting a second mortgage is the right route for you, we’ve answered the most common questions, including which requirements you’ll need to meet for your application to be successful.

Can I get a second mortgage to buy another home?

Yes, it is possible to obtain a second mortgage to buy another home. However, it’s important to bear in mind that not every lender will offer second home mortgages and they are subject to affordability and eligibility. Often, these long-term loans also come with a higher interest rate, but they can be advantageous if you plan on building your property portfolio or renting out your secondary house using a buy-to-let mortgage.

What affects whether I’m approved for a second home mortgage?

The two most important factors that will affect whether you will be approved for a second home mortgage are affordability and eligibility. First and foremost, you must be eligible to apply for a second home mortgage. This typically means having a good credit history and being between the lender’s age parameters, but the eligibility criteria varies between lenders.

How much deposit do I need for a second home?

Alongside meeting this eligibility criterion, you must also prove that you can afford a second mortgage.

As a result, you must have a sustainable source of income, at least a 10 per cent deposit, and should be able to demonstrate that you can afford the second home mortgage repayments on top of your existing first charge mortgage repayments.

It’s worth bearing in mind, however, that while a 10 per cent deposit is typically sufficient to secure a second home mortgage, some lenders can require a minimum of between 25 and 40 per cent deposit depending on the type of mortgage you opt for.

What type of second mortgage do you need?

There are three types of second mortgages that you should be aware of.

This includes residential mortgages, buy-to-let mortgages, and holiday home mortgages.

Residential mortgages are ideal for individuals that require a second residence in addition to their primary residence. To qualify for this type of mortgage, you’ll need an excellent credit score, stable income that covers both mortgages, and bank statements that prove you can afford at least a 15 per cent deposit.

A buy-to-let mortgage, on the other hand, is suitable for prospective landlords that want to purchase a secondary home to then rent out the property. To obtain a buy-to-let mortgage, you must have a good credit score, evidence that the rental income from the property would cover the mortgage repayments (if you could not afford them without this additional income), and proof that you could afford a substantial 25-40 per cent deposit.

Alternatively, you could apply for a holiday home mortgage if you plan on renting out the property for more than 210 days a year. As the name suggests, this type of mortgage is best if you want to rent out the property for holiday periods. While these mortgages tend to have a stricter lender criterion, they can be incredibly lucrative.

How do you go about getting a second mortgage?

The process of obtaining a second mortgage is actually very similar to applying for your first mortgage. From contacting a mortgage advisor to choosing your lender and achieving an agreement in principle, you can see the full process below.

  • Reach out to your existing lender for deals
  • Do your lender research to compare against your existing lender’s offers
  • Select the right type of mortgage
  • Obtain an agreement in principle from your chosen lender
  • Contact your property solicitor
  • Fill out and submit your mortgage application

Purchase a second pad with Mistoria Estate Agents

Looking to expand your buy-to-let property portfolio? Or maybe you’re keen to acquire a holiday home.

Whatever the motivation for starting the search for a second home, our talented team of estate agents is on hand to help.

As one of the leading estate agencies in the North West, we can provide unmatched customer support and services.

To get in touch, don’t hesitate to give us a call on 0800 500 3015. Alternatively, you can also use the email address to send us your enquiry or check out our convenient online contact page to locate your closest Mistoria Estate Agents branch.

With offices dotted across the UK including popular locations such as Liverpool, Salford (Manchester), Bolton, Worsley, and Cheadle, why not visit your local branch to find out more about how we can help?

To find a new property, buy or sell your home, choose an estate agency that puts your first. Choose Mistoria Estate Agents.

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