Second home mortgages

What is a second home mortgage?

As the name suggests, a second home mortgage is a residential mortgage for a secondary property.

You might need to get a second home mortgage if you're thinking of getting another home to use as a holiday home or to rent out.

But if you’re thinking of buying a second property with the sole intention of renting it out, you need a buy-to-let mortgage.

The main difference between a second home mortgage and a regular mortgage, is that it tends to be more expensive. This is because:

• You usually need at least a 15% deposit
• Affordability checks tend to be more rigorous as you have to prove you can afford to pay off 2 mortgages
• There are higher interest rates
• You have to pay extra Stamp Duty charges

How much Stamp Duty do I pay on a second home?

The extra Stamp Duty Land Transaction (SDLT) charges you must pay vary depending on where your second home is located.

England and Northern Ireland:

Scotland (where 'Stamp Duty' is called Land and Buildings Transaction Tax):

Wales (where 'Stamp Duty' is called Land Transaction Tax):

Are there specific types of mortgages for a second home?

Yes there is depending on what you want to use your second home for.

If you wish to live in your second home, you'll need to get a normal residential mortgage. But you won't be able to rent out the property on the days you're away as that may break the terms and conditions set by your lender.

If you have intentions of letting the property out, you should consider a buy-to-let mortgage. If the property is a holiday home, you might need to get a holiday-let mortgage instead as you'll usually need a commercial mortgage.

Buy-to-let and holiday-let mortgages require a large deposit of 25-30%, and are usually interest-only mortgages where you only pay the interest each month. If you choose this specific type of mortgage, make sure you have a plan in place to be able to repay the capital at the end of the mortgage term.

How much deposit do I need for a second home?

If you get a residential second home mortgage, you'll usually need a deposit of about 15%.

If you want to rent your property out, you'll need a buy-to-let mortgage which requires a deposit of 25%. Holiday-let mortgages need an even bigger deposit of 30%.

Depending on your circumstances, some lenders may require as much as 40% deposit. It's worth speaking to an expert broker at Mojo to understand what second home mortgages are available to you.