Second homes are no longer just a luxury for the very wealthy, as a significant number of UK homeowners now own more than one property.
In England, about 2.1 million households (roughly 3% of all households) had at least one additional property as of 2021–22 (source)
Just over one-third of these owners (around 712,000 households) actually use their extra property as a personal second home for themselves or family, while the majority rent them out to tenants.
The trend is growing: in England, the number of homes classified as “second homes” for council tax purposes reached 279,870 in 2024, up 6.3% from the previous year.
These properties range from holiday cottages by the sea to flats kept for work or family use.
No matter the reason, if you already own a home and want another, you’ll likely need a second home mortgage to finance it. In this guide, we break down how second home mortgages work and what to expect.
Table of Contents
What Is a Second Home Mortgage?
A second home mortgage is a mortgage loan used to buy an additional residential property when you already own a main home.
This second property might be a holiday retreat, a house for family to use, or simply a second residence for yourself.
Unlike a second-charge mortgage (which is a loan secured on your existing home’s equity), a second home mortgage is a completely separate mortgage on a new property.
In other words, you end up with two mortgages: one on your primary residence and another on the second home.
Lenders typically treat a second home mortgage similarly to a standard residential mortgage, but they know you’ll be juggling two properties. This means stricter approval criteria often apply.
Note: If you plan to rent out the second property to tenants, you generally cannot use a normal second home mortgage – you would need a buy-to-let mortgage instead.
But if the second home is mainly for your own or family’s use (not rented out most of the time), then it falls under second home/additional residential lending.
In summary, a second home mortgage lets you borrow money to purchase another house or flat for personal use, on top of your existing home loan. It’s an additional residential mortgage, not to be confused with refinancing or equity release on your first home.
Reasons People Buy a Second Home
Understanding your reason for buying a second home is important because it determines what type of mortgage you need and what costs or rules apply.
People take out second home mortgages for various personal and financial reasons. Here are some common motivations:
Holiday Home
Many buyers want a vacation home – for example, a cottage by the coast or a lodge in the countryside where they can spend weekends and holidays.
In a recent survey, 45% of second home owners said their primary reason was to use it as a holiday home.
Having a dedicated getaway can save on hotel costs and become a future retirement retreat.
Long-Term Investment
A significant number (about 35%) purchase a second property as a long-term investment. They hope the property’s value will appreciate over time, building wealth.
Some might do occasional rentals, but their main goal is to hold a tangible asset. Property is often seen as a relatively stable investment in the UK housing market.
Future Retirement Home
A smaller portion (around 9%) buy a second house intending to retire there someday.
Purchasing it early allows them to use it for holidays in the meantime, and eventually move in full-time later on.
This can be part of a long-term plan, especially if the area is currently affordable or holds sentimental value.
Family Use or Second Residence
Some people buy a second home to be used by family members or as a second residence for work.
For instance, you might get an apartment in a city where you work during the week (to avoid long commutes) or a house for an elderly parent/child to live in.
While only a small share of owners (4%) said they bought a second home to live in while working away, this can be important for certain careers.
How Do Second Home Mortgages Work?
Second home mortgages work very much like a standard mortgage. You borrow a large sum to purchase a property and repay it monthly with interest. The loan is secured against the second property.
However, because you already have (or recently had) a mortgage on your main home, lenders will scrutinize your finances more carefully.
Affordability checks are tougher for a second home. The lender will assess whether you can afford both your existing mortgage and the new one, along with all related expenses.
For example, NatWest explains that they will factor in your current mortgage payments and other property costs when calculating affordability for a second mortgage.
Essentially, you must prove you have sufficient income (and low enough existing debts) to comfortably cover two sets of mortgage payments. If you have a partner or co-borrower, both incomes might be considered.
You don’t necessarily need to have paid off your first mortgage, but it can help. Lenders may look more favorably if your first home loan is largely paid down or if you have substantial equity, because that suggests your finances are in good shape.
Credit history and financial profile matter as well. As with any mortgage, a good credit score, stable employment, and low outstanding debts will improve your chances of approval.
Lastly, when you apply, you’ll need to declare the intended use of the second property. If it’s for personal use (holiday, family, etc.), it qualifies as a second home mortgage. The lender may even ask for assurance that the home won’t be regularly rented out.
Second Home Mortgage vs Buy-to-Let vs Residential Mortgage
| Feature | Residential Mortgage | Second Home Mortgage | Buy-to-Let Mortgage |
| Purpose | Your only or main home | Additional property for personal use | Property to rent out to tenants |
| Deposit required | From 5–10% | Typically 15–25% | Typically 25–35% |
| Interest rates | Lowest | Slightly higher than residential | Similar to or higher than second home |
| Affordability check | Based on the borrower’s income and outgoings | Must cover both main and second home costs | Based on expected rental income |
| Mortgage type | Usually repayment | Usually repayment | Often interest-only (capital repaid later) |
| Typical lender criteria | Standard credit and income checks | Stricter: must prove two mortgages affordable | Rent-cover tests, landlord experience, larger deposit |
| Use restrictions | No restrictions | Must be for personal/family use, not full-time let | Must be rented out; restrictions on owner use |
In conclusion, second home mortgages are offered by a wide range of UK lenders – from big banks to smaller building societies.
The key is to meet their requirements and choose a lender that offers a favourable deal for your circumstances.
With proper research and possibly some advice from a mortgage adviser, you can find a second home mortgage to help make that additional property a reality. Get started.
Your home may be repossessed if you do not keep up repayments on your mortgage.
All content is written by qualified mortgage advisors to provide current, reliable and accurate mortgage information. The information on this website is not specific for each individual reader and therefore does not constitute financial advice.
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