Updated: December 17, 2021

Second-Time Buyer Mortgages

Need help on finding a second time buyer mortgage? Find out how much deposit you'll need, plus everything else for quick approval, in our in-depth guide.

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: December 17, 2021

Finding the right mortgage to buy your second home can seem just as daunting as the first time around. Even though you know more about the process, and you’re probably in a stronger position financially, there are so many options available that it can be difficult to know which one suits you.

To help you approach the process confidently, this guide will answer the most common questions about second-time buyer mortgages and offer tips on how to find the very best deal in your circumstances.

What is a second-time buyer?

Just as a first-time buyer is someone buying their first home, a second-time buyer is someone buying their next home. However, there is a difference between a second-time buyer and a second home buyer:

  • A second-time buyer is someone who has sold their first home (or plans to sell it soon) and is looking to buy a new property that will become their only residence.
  • A second home buyer is someone who intends to keep their current home but is also looking to buy another property.

The difference is important because second home buyers need to be aware of the additional rules around stamp duty and capital gains tax on second homes. It’s also important because these two types of buyers may need different types of mortgage.

When you’re looking for a mortgage, it’s helpful to work with an expert who specialises in transactions like yours. Whether you’re considered a second-time buyer or a second home buyer, we can connect you with the right broker, who thoroughly understands your needs.

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How much deposit will you need?

Deposit requirements for second-time buyer mortgages are no different to first-time buyer deals. You’ll usually need a deposit of a minimum of 10% of the property’s value, but there are lenders who will accept as little as 5% under the right circumstances.

As a second-time buyer, you might find it easier to raise that deposit. Selling your first home will give you back equity made up of your original deposit plus any capital repayments you’ve made. Plus, if you sell your home for more than you paid for it, you’ll be able to put those profits towards your second home.

However, it can still be difficult to raise the deposit for your second home, particularly if…

  • You bought your first home with less than a 10% deposit
  • You don’t have much equity in your property
  • Your next home is a lot more expensive than the first

If you need help raising your second-time mortgage deposit, you might consider buying through a government scheme – read on for more information.

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What government schemes are available?

As a second-time buyer, you’re eligible for the government’s mortgage guarantee scheme, which gives you access to mortgages with deposit requirements of less than 10% from participating lenders until April 2022. Newly built properties are excluded from the scheme, so you can only buy a previously owned home.

Another government scheme open to second-time buyers is Shared Ownership. This allows you to buy a share (between 10% and 75%) of certain newly built properties and rent the remaining share from a housing association. Over time, you can increase the share of the property you own by buying more of a stake in 1% increments.

In the past, second-time buyers were also eligible for the government’s Help to Buy equity loan scheme. This makes it possible to buy with a 5% deposit, a 20% government equity loan (40% for London properties) and a 75% mortgage (55% for London properties). Unfortunately, this scheme is now only available to first-time buyers.

While all these different rules can seem complicated, there are brokers who specialise in each scheme, who can guide you through the process.

Can you keep your current mortgage when buying a new home?

Yes, it is sometimes possible to keep your current mortgage deal and move it over to a different property. This is called mortgage porting.

If you’re happy with your current mortgage terms and interest rate, you can ask your lender if it’s possible to port the mortgage. However, there will be paperwork and fees involved, so you should know that this is not necessarily an easier option than finding a new mortgage.

Before you decide to port your mortgage, you should take the opportunity to shop around and see if there are better deals available. This might seem like a lot of work, but with the help of a broker, it’s easy to find the best deals. They’ll also tell you if you’re better off sticking with your current lender.

Speak to a broker who specialises in second-time buyer mortgages

Because it’s difficult to take into account all of these different factors when you compare deals, many people choose to work with a broker. They can provide personalised advice on which deal is best for you and tell you about mortgage deals that aren’t always advertised to the public.

If you’d like to speak to a broker with experience working with second-time buyers, we can match you with someone we’ve vetted and approved based on their track record helping second-time buyers get the mortgages they need. Call us on 0808 189 0463 or make an enquiry online to start the process today.

FAQs

What types of mortgages are available to second-time buyers?

As a second-time buyer, you’ll have access to a similar range of residential mortgage products as a first-time buyer, though you may be offered different rates. These include fixed-rate mortgages, tracker mortgages and discount mortgages.

Fixed-rate mortgages tend to be the most popular choice. Although the interest rate they charge is often higher than the initial rate offered by a tracker or discount mortgage, many buyers prefer to know for sure that their rate will not increase for the agreed period.

Ask a quick question

We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in all different mortgage subjects. Ask us a question and we'll get the best expert to help.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

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FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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