Second home mortgages

A second home mortgage is a residential mortgage on a property the borrower uses alongside a main home, such as a flat near work or a holiday home kept for personal use. It is assessed much like a first mortgage, but the lender includes the cost of the existing mortgage when it works out what the borrower can afford.

Because the borrower or their family uses the property, a second home mortgage is usually a regulated residential mortgage under the FCA's mortgage rules. That sets it apart from loans on homes bought to let, which are assessed on rent and are covered by different rules and products.

Lenders ask why the second home is needed and how it will be used. A weekday flat for work, a home for a student child or a coastal cottage kept for weekends are common reasons. Some lenders have limits on where the property is, how far it is from the main home, or the type of building.

Yes, it is possible to have more than one residential mortgage, as long as the borrower can afford both and the lender accepts the reason for the second home. Lenders add the payments on the existing mortgage to other commitments and test whether the income still supports the new loan at a stressed interest rate.

Some lenders cap the total borrowing across both homes as a multiple of income, and others look in detail at monthly spending. Joint borrowers can combine incomes, and the deposit can come from savings or from equity released on the main home through a remortgage or a further advance.

Each lender treats second homes slightly differently, so criteria on income, property type and use vary across the market.

Deposits for second homes are often larger than for a main home, and many lenders ask for at least a quarter of the price, though this varies. Stamp Duty Land Tax in England and Northern Ireland adds a surcharge on additional homes, which is 5% on top of the standard rates from 31 October 2024 (GOV.UK, accessed 20 Oct 2026).

Scotland and Wales charge their own versions of the surcharge, through the Additional Dwelling Supplement and the higher rates of Land Transaction Tax. Council tax can also be higher, because many councils in England and Wales can charge a premium on homes that are not anyone's main residence.

Running costs on top of the mortgage include insurance, repairs, utilities and travel. Building these into the budget gives a fuller picture of whether two homes are affordable at the same time.

Letting a second home to paying guests or tenants usually needs the lender's consent, because a residential mortgage assumes personal use. Occasional lets may be allowed with permission, but regular letting normally means switching to a holiday let or buy-to-let mortgage, which is assessed on the expected income rather than the borrower's salary alone.

Using a property partly for family and partly for guests is common with holiday homes. Lenders that offer holiday let mortgages often allow some personal use, with limits set out in the offer. How that lending works is explained in the holiday let mortgages section, which covers income assessment and criteria.

Letting without consent can breach the mortgage terms and the insurance policy, so it is worth checking the position before a property is advertised to guests.

Second home mortgages differ on the maximum loan-to-value, how income is assessed, whether the existing mortgage is stress tested, fees and early repayment charges. Comparing offers on the total cost over the fixed period, together with any limits on location or use, gives the clearest view of how deals compare on a specific purchase.

Some borrowers also compare a second home mortgage with releasing equity from the main home, or with a holiday let mortgage if letting is part of the plan. Each changes the tax, the stamp duty and the lender's assessment.

A broker who arranges holiday home and second home lending can explain which lenders suit a particular case. The holiday let mortgage brokers page lists firms that arrange this kind of mortgage.