What counts as a second home?
A second home is a property you own alongside your main residence and plan to use yourself, maybe a holiday cottage, a flat near your workplace, or a place family can stay in. The key point is that you are not letting it out commercially on a regular basis. Once you do that, it usually counts as a buy-to-let or a holiday let, and those need a different type of mortgage.
Lenders will want to know why you are buying and how you plan to use the property. Being straight with them from the start means they can point you at the right product and you avoid problems further down the line. If there is any chance you will rent it out, even for the odd week, tell your adviser.
Deposit requirements for a second home
Most lenders ask for a deposit of 15% to 25% on a second home mortgage, against as little as 5% on a first home. That gap exists because a borrower running two properties carries more risk in the lender’s eyes.
The more you put down, the better the interest rates and the wider your choice of lender. Reach 25% or more and you tend to see the sharpest deals on offer for a second home.
The deposit can come from savings, from equity you release from your main home through a remortgage, or from a gift by a family member. Whatever the source, you will need to show the lender clearly where it came from.
Affordability and what lenders look at
When a lender looks at your application, they weigh up the payments on your current mortgage and the payments on the second property together. You need enough income to cover both without strain, on top of your other financial commitments.
Some lenders work to a combined debt-to-income ratio (your total borrowing measured against your total income), while others judge each mortgage on its own. Your adviser knows which lenders treat second home applicants more kindly and can aim your application at them.
Running costs to consider
A second home carries running costs beyond the mortgage, and they are worth budgeting for from the start. You will pay council tax at the full rate, and some local authorities add a premium on second homes. On top of that come buildings and contents insurance, maintenance and repairs, and utility bills that keep ticking over even when nobody is staying there. If the property is leasehold, expect ground rent and service charges as well.
Since April 2025, councils in England can charge a council tax premium of up to 100% on second homes. In the areas that apply it, that is a large extra bill, and it can change whether a second property makes financial sense at all.
How Clearview can help with your second home purchase
At Clearview Mortgage Solutions, we work through the detail of a second home purchase with clients all the time. We will check what you can genuinely afford across both properties, find lenders with competitive second home rates, and make sure every cost is clear to you before you commit.
Contact us for a free, no-obligation chat about your second home plans.