A guide to second home mortgages
Buying a second home is an exciting prospect, but the mortgage process is more involved than for a standard purchase. Lenders apply different criteria, deposits are larger, and you’ll face additional costs like the stamp duty surcharge. This guide walks you through everything you need to know.
In this guide
What counts as a second home?
A second home is a property you own in addition to your main residence that you intend to use personally. This could be a holiday cottage, a flat near your workplace, or a property you keep for family visits. The defining feature is that you do not let it out commercially on a regular basis — if you do, it may be classified as a buy-to-let or holiday let, which requires a different type of mortgage.
Lenders want to understand why you’re buying a second home and how you intend to use it. Being upfront about your plans helps them recommend the right product and avoids complications later. If you plan to rent the property out at any point, even occasionally, you should discuss this with your adviser.
Deposit requirements for a second home
Most lenders require a minimum deposit of 15% to 25% for a second home mortgage, compared to as little as 5% for a first home. The higher deposit reflects the increased risk lenders associate with borrowers maintaining two properties.
A larger deposit will give you access to better interest rates and more lender options. If you can put down 25% or more, you’ll typically unlock the most competitive deals available for second home purchases.
Your deposit can come from savings, equity released from your main home through a remortgage, or a gifted deposit from family. Whichever source you use, you’ll need to evidence it clearly for the lender.
Affordability and what lenders look at
When assessing your application, lenders consider both your existing mortgage payments on your main home and the proposed payments on the second property. You’ll need enough income to comfortably cover both, along with your other financial commitments.
Some lenders use a combined debt-to-income ratio, while others assess each mortgage separately. Your adviser will know which lenders are more favourable for second home applicants and can target your application accordingly.
Running costs to consider
Beyond the mortgage payments, a second home comes with ongoing costs that you need to budget for. These include council tax at the full rate (some local authorities charge a premium on second homes), buildings and contents insurance, maintenance and repairs, utility bills even when the property is unoccupied, and potentially ground rent and service charges if the property is leasehold.
From April 2025, local authorities in England have the power to charge a council tax premium of up to 100% on second homes. This is a significant additional cost that could affect the financial viability of owning a second property in some areas.
How Clearview can help with your second home purchase
At Clearview Mortgage Solutions, we regularly help clients navigate the complexities of second home purchases. We’ll calculate your true affordability across both properties, find lenders who offer competitive second home rates, and ensure you understand all the associated costs before you commit.
Contact us for a free, no-obligation consultation to discuss your second home plans.
Related guides
More guides in our second home mortgage hub.
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