How much deposit do I need for a second home mortgage?
Second home mortgages typically require 15-25% deposit minimum, with the best rates available at 25-40% deposit. Higher deposit requirements apply because lenders view second homes as higher risk—borrowers are more likely to prioritise their main residence if financial difficulties arise. You'll also pay an additional 3% stamp duty surcharge on each band.
What is a second home mortgage?
A second home mortgage finances a property that's not your main residence, such as a holiday home. They typically need 15-25% deposit and carry higher rates than primary residence mortgages. You'll also pay 3% stamp duty surcharge. Your Home Finance finds competitive second home deals.
Content reviewed: 13 January 2026
What is a Second Home Mortgage?
A second home mortgage is a loan to purchase a residential property that isn't your primary residence. This could be a holiday home by the coast, a cottage in the countryside, a city apartment for weekend visits, or a property near family members you visit regularly.
Second home mortgages are distinct from buy-to-let mortgages. They're designed for properties you'll use personally rather than rent out as an investment. While some lenders allow occasional letting (typically up to 12 weeks per year) when you're not using the property, the primary purpose must be personal use. If you plan significant rental income, you need a buy-to-let mortgage instead.
Lenders view second homes as higher risk than main residences—if financial difficulties arise, borrowers prioritize payments on their primary home. This results in higher interest rates (typically 0.5-1.5% more) and larger deposit requirements (usually 15-25% minimum) compared to main residence mortgages. You'll also pay an additional 3% stamp duty surcharge on each band, significantly increasing upfront costs.
Key Features of Second Home Mortgages
Buy a holiday home or weekend retreat for personal use and enjoyment
Purchase property anywhere in the UK or abroad as your second residential home
Benefit from property value growth while enjoying personal use of the property
Many lenders allow you to let the property when you're not using it
Expert Insights on Second Home Mortgages
Second home mortgages typically require minimum 15-25% deposit, with the best rates at 25-40% deposit. Higher LTV lending (5-10% deposit) is rare for second homes as lenders view them as higher risk—you're more likely to prioritize your main residence if financial difficulties arise. The larger deposit requirement means you'll need substantial savings to purchase. Some lenders offer up to 85% LTV but with significantly higher rates.
Second home mortgage rates are typically 0.5-1.5% higher than equivalent main residence rates. This reflects the higher risk—lenders know borrowers prioritize their main home payments first. For example, if main residence rates are around 4.5%, expect second home rates of 5-6%. The rate premium increases further if you want high LTV lending. Compare total costs carefully as the higher rate significantly impacts long-term expenses.
Buying a second home incurs an additional 3% stamp duty on each band in England and Northern Ireland (rates differ in Scotland and Wales). For a £300k property, you'd pay around £14,500 instead of £5,500—an extra £9,000. This applies even if you plan to sell your main home eventually. If you sell your main residence within 3 years of buying the second home, you can reclaim the surcharge. Factor this significant extra cost into your budget.
If you plan to rent the property regularly, you need a buy-to-let mortgage, not a second home mortgage. Second home mortgages are for properties primarily for your personal use, with only occasional letting allowed (usually less than 12 weeks/year). BTL mortgages assess rental income potential; second homes assess your income. BTL is often cheaper overall if you're renting significantly. Be honest about intended use—wrong mortgage type can void your insurance.
Lenders assess affordability based on your income and existing commitments, including your main residence mortgage. They want to ensure you can afford both mortgages comfortably. Typically expect stress-testing at 6-7% interest rates. If you earn £60k, have a £150k main mortgage costing £900/month, and want a £200k second home mortgage costing £1,000/month, lenders check you can afford both plus stress scenarios. Self-employed or retired? Income assessment may be stricter.
Don't just budget for the mortgage. Second homes incur council tax (no single person discount—you pay full rate even if empty most of the time), utilities, insurance (often higher for unoccupied properties), maintenance (you can't address issues as quickly if it's far away), and travel costs to visit. A £250k second home might cost £3,000-£5,000/year in running costs beyond the mortgage. Ensure you can comfortably afford the full picture.
Frequently Asked Questions
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