Having a second home can have great tax benefits, but don't take this decision lightly. You'll need to have a larger deposit, a mortgage with higher interest rates, and be able to repay both mortgages at once. Speak to an expert broker at Mojo who can help you decide whether a second home mortgage is right for you.
Pros and cons of second home mortgages
Pros:
- Not tied to your current one – no risk of losing the home you’re already living in
- You have a secondary home for summer holidays or quick getaways
- Could form part of a diversified investment portfolio, that may provide you with an additional source of income
- Some local authorities charge less council tax on second
Cons:
- A larger deposit is needed (usually around 15%)
- Stricter affordability checks
- Can be expensive paying for 2 mortgages at same time
- You'll have to pay extra Stamp Duty charges
What our expert says
Second home mortgages FAQ
Is it hard to get a second home mortgage?
No, anyone can apply for a second home mortgage.
You’re more likely to be approved if you:
- Show a track record of paying your current mortgage on time
- Have a good credit score
- Can prove that you can afford the extra payments of a second home
How much deposit do you 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.
How much Stamp Duty do you pay on a second home?
The extra Stamp Duty charges you must pay vary depending on where the second home is located.
In England and Northern Ireland for properties over £40,000, you need to pay a second home surcharge of 3%.
In Scotland, you must pay a second home Stamp Duty surcharge of 6%.
And in Wales, the surcharge is 4%.
Can you have 2 residential mortgages?
Yes, there's no law which caps the amount of residential mortgages you can have.
But, this is all subject to whether you can get approved from a lender and pass their affordability checks.
Learn about different mortgage types
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Page last reviewed: 27 September 2023
Reviewed by: Claire Flynn
YOU SHOULD THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME/PROPERTY. YOUR HOME/PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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