Getting Another Mortgage If You Already Have One

There’s lots of reasons why someone might want to apply for a second mortgage. Perhaps you have your sights set on a holiday home or an investment property. Maybe you’re between homes and want to build a new one.

This guide provides all the information you’ll need on how to get a mortgage for a second property, what the process involves and where to look for guidance to give your application the best chance of success.

Can you get a mortgage if you already have one?

Yes, it’s possible. In fact there’s plenty of lenders who can offer second mortgages but, as with everything to do with home ownership, the key factors are:

What’s the difference between a second mortgage and a second charge mortgage?

A second charge mortgage can be confusing because it can often be called a ‘second mortgage’ too. But a second charge mortgage is quite different.

The table below illustrates how these two types of mortgage differ from each other…

How do second mortgages work?

Second mortgages essentially work in the same way as any other. They are a separate home loan secured against a property you own, in addition to your main residence.

They do not replace or combine with your first mortgage, so you will make two repayments each month. Interest charges can be higher for a second mortgage and the affordability assessments may be slightly stricter to ensure you can meet all your financial obligations.

Lenders typically charge higher rates and have a stricter criteria assessment for second mortgages because extra debt carries a greater risk. In other words, they will be concerned about whether you can afford another mortgage on top of your existing one.

To offset the perceived risk, it’s not uncommon for lenders to ask for a larger deposit as well as charging more in interest. It’s also not uncommon for them to carry out extra scrutiny on your affordability.

An experienced mortgage broker will be able to talk you through what lenders could ask for, so you know what to expect. They will also look for the best possible deals out there to try and minimise the extra costs lenders will want to charge you.

How to get approved for a second mortgage

If you want to apply for a second mortgage, there’s a few simple steps you can take at the outset to make the process much more straightforward.

Our free, broker-matching service allows us to quickly assess your circumstances so we can pair you with a mortgage advisor who’s right for your needs. Make an enquiry to get started.

What’s the eligibility criteria?

What lenders want to see is a good credit score and a healthy level of disposable income and enough mortgage deposit (the more, the better), which reassures them that you can afford to pay back a second mortgage without running into trouble.

The other key factors lenders will look at would be:

How much deposit do you need?

Lenders demand a larger deposit for a second mortgage than they might do for your first due to the bigger risk involved. You should expect to need at least 15-20% deposit, although it will depend on a few criteria:

The more money you put down as a deposit, the stronger your application and the more likely it is that you’ll get a better deal. Your broker will know which lenders are likely to require a higher deposit than others, and where your criteria fits.

Getting a buy-to-let mortgage if you already have a mortgage

Generally, (but not always), you will need to already have a residential mortgage if you want to apply for a buy-to-let mortgage. It is proof of your ability to manage this level of borrowing.

If you want to apply for a Buy-to-let mortgage here’s a few key points to consider:

Can you have multiple buy-to-let mortgages?

Yes, you can. Some lenders are willing to offer more than one buy-to-let mortgage but this is dependent on those strict criteria already set out and whether you have the required deposits.

Landlords who own at least four properties may be eligible for a buy-to-let portfolio mortgage. This allows a single umbrella mortgage to cover all loans across all properties rather than many separate ones.

There are many elements to a buy-to-let portfolio mortgage, from registering as a limited company to tax rules, which your broker can help talk you through and provide support and understanding.

Get matched with a broker who specialises in second mortgages

Understanding the various criteria for a second mortgage can be daunting and confusing. With so many options and rules, it can be off-putting if you’re unsure whether you even qualify for one.

This is where the mortgage brokers we work with come in. We carefully match you with a second mortgage specialist so they can provide support as well as find the best deals out there for you. They understand the market, the lenders, the criteria, and all of those challenges you may come up against.

It’s easy to get started. Simply call 0808 189 0463 or make an enquiry online to get a free, no-obligation initial introduction with a second mortgage broker who will be happy to help you.