Remortgage to Buy a Second Home: How It Works

Yes, you can usually remortgage your main home to buy a second property. You borrow more against the home you own, then use that money as the deposit on the second property or to buy it outright.

You do this either by moving to a new lender for a bigger mortgage or by taking extra borrowing from your current one. The lender’s questions are simple: how much equity you have, whether you can afford the bigger mortgage, and what the second property is for.

The answers decide how much you can raise and which lenders will help. For the wider picture on switching and releasing equity, see our complete UK remortgage guide.

Can you remortgage to buy a second home?

Yes, if the equity and affordability work. Most lenders will let you release equity to buy another property, as long as you can afford the larger mortgage and tell them what the money is for. Some cap the loan-to-value lower when the money buys another home. The second property then needs its own mortgage, or the released equity buys it outright.

How does it work in practice?

1. Release equity from your home. You remortgage for a larger amount than you owe now and receive the difference.
2. Use it as a deposit or to buy outright. Most people use it as a deposit and take a second mortgage on the new property.
3. Mortgage the second property if needed. That is a second home mortgage if you will use it yourself, or a buy-to-let mortgage if you will let it out.

You end up with two mortgages, one on each property, or one larger mortgage if you buy the second home outright.

How much equity could you release?

Equity is your home’s value minus what you owe. Most mainstream lenders will lend up to 85% to 90% of your home’s value for a remortgage with extra borrowing, but the best rates are usually at 75% or below, and some lenders set lower limits when you are raising money for another property.

Do lenders count both mortgages?

The lender looks at your income and outgoings with the larger mortgage in place. If you are also taking a mortgage on the second property:

• Second home for your own use: the lender counts both mortgage payments against your income. This is often what limits the amount.
• Buy-to-let: the rent is meant to cover the buy-to-let mortgage, so it may have less effect on your personal affordability. Your main-home lender may still ask about it.

Self-employed or variable income? See our guide to remortgaging when self-employed.

Is it a second home or a buy-to-let?

How you plan to use the property changes the mortgage, the lender list and the tax.

	Second home (your use)	Buy-to-let
Mortgage type	Residential second home mortgage	Buy-to-let mortgage
How lending is assessed	Your income, with both mortgages counted	Mainly the expected rent
Can you let it out?	Not usually, without lender consent	Yes
Holiday letting	Not usually	Needs a holiday let mortgage

Be clear with the lender about the purpose. Letting a property mortgaged as a second home without consent breaks the mortgage terms. For investment purchases, see our buy-to-let mortgage advice. If you want to let it to holidaymakers, our holiday let mortgage guide covers how those lenders assess income.

What taxes apply to a second home?

• Stamp Duty. In England and Northern Ireland, buying an additional residential property usually means paying the higher rates, which are 5% above the standard rates on the whole price. GOV.UK explains the rules in its guide to buying an additional residential property. Scotland and Wales have their own surcharges. Use our Stamp Duty calculator.
• Capital Gains Tax. A second home does not get the main-residence exemption, so you may pay CGT on any gain when you sell. Rates are 18% and 24%, as set out on GOV.UK’s Capital Gains Tax rates page. See our Capital Gains Tax guide.
• Council tax. Many councils in England charge a premium of up to 100% on second homes.
• Rental income. If you let the property, the rent is taxable. Mortgage interest on a rental gets a 20% tax credit rather than being deducted from the rent. From April 2027 property income is taxed at 22%, 42% and 47%, with the credit at 22%.

Take advice from a tax adviser before you buy. The structure can affect your tax bill for years.

What are the alternatives to a remortgage?

• Further advance. Borrow more from your current lender, often without changing your existing deal. Useful if moving lender would mean an early repayment charge. See our guide to early repayment charges.
• Second charge loan. A separate loan secured on your home, leaving your main mortgage untouched. Often a higher rate, but can make sense if your current rate is low.
• Let to buy. Let your current home and buy a new main residence. See our let to buy guide.

Releasing equity is the main option when your current deal is ending. Mid-deal, a further advance or second charge may cost less overall once early repayment charges are included.

Which situations do lenders see most?

These are illustrative situations, not Option Finance client outcomes.

What mistakes should you avoid?

1. Forgetting the higher Stamp Duty. It can add tens of thousands of pounds.
2. Only looking at the rate. Releasing equity raises your borrowing for the whole term, so look at the total cost.
3. Leaving no cushion. Two properties mean two sets of repairs, insurance and bills, and possibly empty periods.
4. Not saying what the money is for. Lenders ask. Some restrict borrowing to buy another property.

Frequently asked questions

Speak to Option Finance about buying a second home

Tell us what your home is worth, what you owe and what you want to buy. We will tell you straight how much you could raise and which route costs least.

Book a free initial consultation using the enquiry form below. See our remortgage advice and our guide to having more than one mortgage.