Second home mortgage lenders
You will need to find a suitable mortgage lender when you buy a second property with a second home mortgage and luckily there are tons of fantastic second-home mortgage lenders in the United Kingdom.
Finding the right one can be challenging as they have different terms, rates, and mortgage types. This guide will help you find the right lender for you and your second residential mortgage and doing some additional research always helps before making such a significant financial commitment.
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What is a lender?
A mortgage lender is a financial institution you go through that will lend you money to buy a second property. The mortgage servicer will send you all of your mortgage statements, and you will have to make mortgage repayments to them.
Your lender is also in charge of handling the day-to-day tasks of managing your second loan. No two lenders are the same, and each lender will have its own borrowing guidelines and regulations.
Lenders will want to verify your creditworthiness and ensure you can repay your loan. The lender will also set the interest rate, terms, repayment schedule, and other factors that affect your mortgage.
How to get a second mortgage for another property
Some people may struggle to get a second mortgage on top of their existing mortgage, depending on the lender they go through. You will have to undergo a stringent application process to be considered, so be sure to have your finances and documents in order.
Most lenders limit how much they can lend a single person, so you may have better luck getting a second residential mortgage through a private bank. A specialist mortgage broker can assist, help you compare mortgages, and find a suitable lender for you.
Getting approved for a second mortgage is not that easy, and if you do happen to get turned down, there is no need to worry, as there are tons of other lenders available. With a sufficient income and the right advice, you can obtain a big loan.
The top lenders for 2nd mortgages
The most prominent names on the high street are not always the lenders most likely to approve mortgage applications for heavy amounts. If you are looking for a big loan, it is much better to go through private mortgage lenders as you are more likely to find the best rates and deals.
In most cases, you can only get in touch with these lenders if you go through a specialist broker. Loan Corp is fantastic and can assist you in finding an excellent lender. The following are some of the top lenders in the UK:
HSBC
Residential mortgages from HSBC Global Private Banking are an easy way to borrow money against your property as part of your overall banking relationship.
HSBC provides competitive rates across customised mortgages and repayment alternatives for fully constructed primary residences, second houses, and investment properties.
HSBC offers home mortgages at fixed and variable rates, capital repayment, and extended interest-only terms, and the process with them is speedy and easy.
HSBC offers:
- Tracker Mortgages
- Fixed-rate Mortgages
- Standard variable rate (SVR) mortgages
Rates
- Fixed-rate mortgages: 60-90% LTV, and the interest rates start at 5.99% and go up to 6.64%
- Tracker mortgages: 60-90% LTV, and the interest rates start at 3.04$ and go up to 3.64%
Barclays
Barclays offers a range of competitive mortgages to Jersey, Guernsey, and the Isle Of Man residents. They have a qualified and professional team, each holding a Certificate in Mortgage Advice and Practice (CeMAP).
Barclays offers part and part mortgages, tracker mortgages, and fixed-rate mortgages. They also have several options for monthly mortgage repayments and interest-only and capital repayment options.
Rates
Their rates start at 4.24% and can reach as high as 5.82%, depending on the type of loan and payment scheme you choose.
Yorkshire Bank
Yorkshire Bank can help you with several mortgage options. You can easily book an appointment with them and look at what options are available to you according to your circumstances and your budget.
Their maximum loan offer is capped at 90%, and their rates start as low as 4.62% and can be as high as 6.60%. However, these rates are subject to change. Yorkshire Bank is part of Clydesdale Bank PLC and Virgin Money.
Yorkshire Bank offers buy-to-let, fixed-rate, and offset mortgages. They also have better rates for existing customers, so if you take your first and second mortgage out with them, you may be able to save some money.
Rates
- Offset variable rate: Rates start at 3.89% and can go as high as 6.60%
- Fixed-rate: Rates start at 4.71% and can go as high as 5.17%
- Buy-to-let: Rates start at 5.34% and can be as high as 6.30%
Halifax
Halifax allows you to borrow up to 85% of the property’s value, which can drop to 75% if you are on an interest-only mortgage.
You can find out how much you could borrow by requesting an agreement in principle with Halifax. If you meet their particular requirements, you can easily apply online and book a consultation with one of their experts. The best part about Halifax is that every month they pay off a lucky customer’s mortgage up to £300,000.
Halifax has set rates that do tend to change. All Halifax mortgages revert to a tracker rate (currently 6.59%) after the fixed-term period, which tracks at +4.34% above the Bank of England Bank Rate.
Rates
Buy-to-let mortgages: Their rates differ depending on the period, but the rates start as low as 5.56% and can be as high as 6.61%. Halifax’s buy-to-let mortgages can be as high as 75% of your property value.
Natwest
Depending on eligibility and affordability, you can get a second residential mortgage with Natwest. However, you may not use it as a rental property or for commercial purposes, although it may be a holiday home or a second house.
Natwest offers mortgages at a tracker rate or a fixed rate, and they also provide Green mortgages, interest-only mortgages, and a Standard variable rate. Natwest can help you buy a second property at an interest rate and period that suits you.
Rates
Deposit: Their minimum deposit is 10% for second-home mortgages
Rates: Their rates can start as low as 2.95% and can get as high as 5.99%
Nationwide
Nationwide offers mortgages for properties used as second homes: a residence for those who travel for work, a holiday home abroad (or in the United Kingdom), accommodation for dependent residents and relatives, and a primary residence.
They will run a full affordability check beforehand and can tailor a mortgage suitable to your needs and preferences.
Rates
Their interest rates at Nationwide depend on your loan term, loan amount, financial situation, and credit history. Look at the following examples:
- £1,000 – £2,999: Rates as low as 13.9% and high as 29.9%
- £3,000 – £4,999: Rates as low as 9.9% and as high as 29.9%
- £5,000 – £7,499: Rates as low as 5.9% and as high as 29.9%
- £7,500 – £25,000: Rates as low as 4.9% and as high as 29.9%
Santander
Santander is happy to help those looking for a mortgage for a second property. You can use their online calculator or contact them to get a mortgage in principle, and they can assist in finding the best mortgage deals.
rates
Their rates can be as low as 4.44% and get as high as 6.44%.
Santander will do stringent affordability checks to ensure you are not high-risk and can afford your second deposit. Rates also depend on how much deposit you put down and the duration of your loan.
Royal Bank Of Scotland
You can get a mortgage for a second property from the Royal Bank of Scotland as long as you can prove that you have a primary residence. They offer mortgages to people over 18, and you can get a holiday home mortgage from them or a mortgage for a property you want to rent out, as long as you meet the criteria.
The Royal Bank Of Scotland offers:
- Tracker rate
- Fixed-rate
- Buy to let
- Standard variable rate
- Interest only
rates
The following are their most popular rates. The rates may be different for all individual cases:
- 2-Year Fixed: 5.490%
- 5-Year Fixed: 5.540%
- 5 Year Variable: RBC Prime Rate – 0.200% (5.250%)
Second home mortgage lender FAQ
Is the interest rate higher on a second home?
Yes, the interest rate is higher on a second home than on your first mortgage. They are not that much higher, but it does make a difference, and it is something you should carefully think about before making a solid decision.
What are the pitfalls of owning a second home?
You will need to get a specific mortgage if you plan on renting the house out: interest rates are higher than with your first property, you will need to pay maintenance fees, and there is a chance you may need to pay capital gains tax.
Is a second home tax deductible?
As long as the mortgage complies with the same criteria as a primary house, mortgage interest paid on a second home used for personal purposes is tax deductible.
Final Thoughts on second home mortgage lenders
Various lenders can assist in giving you a new mortgage on top of your current mortgage. You may need to research to find the right one, but if you have your finances in order, you should find it very easy.
Our list has some of the best lenders in the United Kingdom, and Loan Corp can assist even further if you still can’t find one. A second property mortgage is a significant investment, and you want to be sure that you can afford it and go through a lender you trust.
Contact us now to get in touch with all the top second-home mortgage lenders and get the best rates.