Buying a second home, for weekends, holidays or family, needs its own kind of mortgage and brings extra costs. This guide explains second home mortgages: what counts as a second home, how the mortgage works, the larger deposit and stamp duty surcharge, the running costs, and what happens if you later let it.
What a second home is
A second home is an additional property you buy for your own use, such as a holiday home, a weekend place, or somewhere for family, rather than to let out. This makes it different from a buy-to-let, which is let to tenants, and from a holiday let, which is commercially let to holidaymakers, as our guide to holiday let mortgages explains. A second home is for personal use, which shapes the mortgage you need.
The mortgage for a second home
A second home is bought with a residential mortgage for a second property, where the lender assesses whether you can afford both your main mortgage (if any) and the second home's mortgage from your income, as our guide to mortgage basics explains. Because you are taking on a second set of payments, affordability is key, and not all lenders offer second-home mortgages, so the choice may be narrower.
The deposit
Lenders often require a larger deposit for a second home than for a main residence, commonly around 25% or more, reflecting the additional risk of a second property. So you will usually need a bigger lump sum than for your main home. Knowing the likely deposit requirement helps you plan, as a second home is a significant financial commitment on top of your existing housing costs.
The stamp duty surcharge
Buying a second home usually means paying the higher-rate stamp duty surcharge, currently 5%, on top of the standard rates, because it is an additional property, as our guide to the stamp duty surcharge explains. This adds a substantial sum to the purchase. Because the surcharge applies to second homes just as to buy-to-lets, it is an important cost to budget for when buying a property for personal use.
The running costs
Owning a second home means running and maintaining two properties: two sets of bills, insurance, maintenance, and council tax, with some areas charging extra council tax on second homes. These ongoing costs add up and should be budgeted for alongside the mortgage. Considering the full cost of keeping a second home, not just buying it, helps you judge whether it is affordable and worthwhile for your circumstances.
If you later let it out
If you decide to let your second home, even occasionally, you generally cannot do so on a standard residential second-home mortgage without permission; you would need consent to let, a buy-to-let, or a holiday let mortgage, depending on how you let it, as our guide to consent to let explains. So if letting is a possibility, it is worth considering the right mortgage and the tax implications from the outset.
Is a second home right for you?
A second home can be a wonderful asset for personal use, but it is a major commitment: a larger deposit, the stamp duty surcharge, two sets of running costs, and the affordability of a second mortgage. Weighing the enjoyment and any long-term value against these substantial costs, and considering the tax position, helps you decide whether buying a second home makes sense for you, ideally with professional advice.
An example of the cost
Suppose you buy a £250,000 second home. You might need a deposit of around £62,500 (25%), and the stamp duty, including the 5% surcharge, would be significant, several thousand pounds more than on a main home. On top come the second home's running costs. This example shows how a second home demands a large upfront sum and ongoing costs well beyond the mortgage itself.
Affordability for two mortgages
If you still have a mortgage on your main home, the lender assesses whether you can afford both that and the second home's mortgage from your income, as our guide to what you can borrow explains. So your existing mortgage reduces what you can borrow for a second home. Being realistic about affording two sets of payments is essential before committing to a second property.
Second home, holiday let or buy-to-let?
It is important to be clear which you are buying, as the mortgage and tax differ: a second home is for personal use, a holiday let is commercially let to holidaymakers, and a buy-to-let is let to tenants on a tenancy. Each needs a different mortgage and has different tax treatment. Choosing the right category from the start ensures you get the appropriate mortgage and understand the costs.
Council tax and second homes
Second homes can attract extra council tax, with many areas now charging a premium on second homes to discourage them and free up housing. This adds to the running costs and varies by area. Checking the council tax position, including any second-home premium, in the area where you are buying is important, as it can add a meaningful sum to the annual cost of keeping a second home.
Insurance for a second home
A second home usually needs its own buildings and contents insurance, which can cost more than standard home insurance, particularly if the property is left empty for periods, as insurers see unoccupied homes as higher risk. Arranging suitable cover that reflects how the home is used is important, both to protect the property and to meet the lender's requirements, adding another cost to factor into owning a second home.
Is a second home affordable?
Deciding whether a second home is affordable means looking beyond the purchase to the whole picture: the deposit, the stamp duty surcharge, the second mortgage's payments alongside any existing one, and two sets of running costs, council tax and insurance, as our guide to true costs relates. Only by adding all of these together can you judge whether a second home genuinely fits your finances over the long term.
A considered purchase
A second home can bring real enjoyment and may hold its value over time, but it is a substantial financial commitment with significant upfront and ongoing costs and tax implications. Weighing the pleasure and any long-term benefit against these costs, and taking tax advice where relevant, helps you make a considered decision. For many, a second home is worthwhile; for others, the costs outweigh the benefits, so honest sums matter.
Go in with the full cost laid out and the tax position understood, and a second home becomes a clear-eyed lifestyle choice rather than a purchase whose true price only becomes apparent after you have committed to it.
In short
A second home is an additional property for your own use, bought with a residential second-home mortgage where the lender checks you can afford both mortgages. It usually needs a larger deposit, often around 25%, and attracts the 5% stamp duty surcharge as an additional property, plus two sets of running costs. Letting it out needs different arrangements and has tax implications, so plan ahead if that is a possibility.
Where to get help and next steps
Read our guides to holiday let mortgages, self-build mortgages, the stamp duty surcharge, and how a mortgage works. This is general information, not mortgage, tax or financial advice; tax rules change, so consider a qualified tax adviser.