What Constitutes a Second Home?

In the world of finance, there are a wide range of finance options available, one of these being second home mortgages. But how is this form of finance different from that of a holiday home or a buy-to-let investment? Our residential finance experts explain all.

To put it simply, a second home is a property purchased with the intent of becoming a residence you solely occupy in addition to your main home. This will be somewhere you visit on a regular basis such as a pied-a-terre in the city used during the working week or a home near the seaside which you live in on weekends. It is therefore typically used for personal enjoyment rather than as a primary residence.

If you would like to purchase a second property and let family live in it rent free, then this will also be seen as a second property.

How to Finance a Second Home

If you’d like to purchase an additional home, then you’ll more than likely require a loan, and there are specific second home mortgages designed for this precise requirement.

Unlike remortgaging or second charge mortgages, these are separate to any loans on any of your existing properties, however any debt will be considered when making affordability checks on application.

Second home mortgages are used to finance the purchase of a property that will be used as a second home rather than a primary residence.

If you require a second mortgage, we at Pure Property Finance can help. Our expert brokers have specialised knowledge and experience in securing financing for second homes. We understand the unique requirements and considerations involved in obtaining a mortgage for a second property, and we’ll help you navigate the complexities of obtaining the finance necessary for your additional property.

Give us a call on 02920766565 and see how we can help you get started today.

How is a Second Home Mortgage Different from a Regular Loan?

As the purchase of this new property is not intended as a money-making venture, second home mortgages tend to have lower interest rates than finance for investment properties. However, these rates will likely still be a slightly higher than those charges on your first mortgage and require a larger deposit too.

If you intend on renting out a property on a permanent basis, then a buy-to-let mortgage is more suitable to your requirements. However, if you intend on using the property on occasion and renting it out for short intervals, such as a few days or weeks at a time, a holiday home mortgage may be a better fit.

In addition to a second home mortgage, you might also want to look into a holiday home mortgage or a buy-to-let mortgage, depending on your individual circumstances.

Let’s break these down a little further…

What Is a Buy-to-Let Mortgage?

A buy-to-let mortgage is a type of mortgage specifically designed for individuals who want to purchase a property with the intention of renting it out to tenants

When you’re looking for a buy-to-let mortgage, it can be challenging to know if you’re getting the best deal. Unless you have the time to approach a huge number of lenders and tailor each application to their specific standards, getting the most competitive quote can be extremely difficult. That’s where our experts come in.

Working with buy-to-let commercial mortgage specialists at Pure Property Finance will not only help you source low buy-to-let mortgage rates – ensuring you’ll make as much profit as possible – but save you hours of your time, too! It’s a win-win.

What Is a Holiday Home Mortgage?

In contrast, a holiday home mortgage is a type of loan designed for purchasing holiday homes here in the UK.

If you’re looking for a second mortgage for a holiday home, you may like to consider renting it out when you’re not using it as lenders are likely to look more favourably on your application if you’ll have additional income to cover the repayment fees.

Do you dream of owning a cute cottage on the Cornish coast or an artsy apartment near Brighton Pier? Well, holiday let mortgages are designed for purchasing vacation homes here in the United Kingdom.

Fancy a Chat Though Your Finance Options?

If you’ve found this post interesting and would like to learn more about hot to finance a second property or how to apply for a loan, give our helpful (but not pushy) finance experts a call on 02920766565 to learn more, or  request a call back here. 

And for more top tips, check out our finance & investment blog, including ‘What is a second charge mortgage loan?‘ and ‘What is a green mortgage?‘.

Published on 14/11/2017

Updated on 06/01/2024