Published: 1st May 2025
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Can I Remortgage To Buy Another Property? Everything You Need To Know
Many people ask us this burning question when weighing up their property investment options. The short answer is yes, you can remortgage to buy another property.
Buying a second home as a renovation investment, a buy-to-let property or a second home with equity from your existing property are all viable reasons to refinance your mortgage. Doing so will allow you to release equity from your current property and use it to fund another.
But, there are things to consider when remortgaging to buy a second home. Here, I’m going to tell you all you need to know to navigate the process smoothly.
Table of Contents
First of all, you’ll need to tell your mortgage broker the reason you want to buy a second home. Why? Well, because this information will help your broker source the best possible products, deals, and lenders for your specific needs.
Here are the most common reasons people remortgage to buy another property:
Setting up a second home
Buying a second home in another location is a common reason people opt for a remortgage. In my experience, the usual motivations for purchasing a second home is to support ill or elderly relatives, to avoid colossal work commutes or as a relaxing holiday residence. If any of these situations apply to you, applying for an additional residential mortgage by remortgaging your existing property is a viable option.
Investing in a property to flip
Another reason people choose to remortgage to buy a second property is to buy a ‘do-er-upper’, refurb it, and flip it for a profit. Property flipping can be a lucrative venture and it’s becoming increasingly popular across the globe. In this case, your route to remortgaging will likely be similar to if you were buying a second home.
Property expert, Damon Woodward, believes that
refurbishing a property and flipping it successfully boils down to many factors, including negotiation:
“Make a note of any issues that you see while viewing a property and use these to get the price down.”
Having a discerning eye and putting yourself in the best possible position to negotiate will ensure you get the best possible price for your investment property—and maximise your potential return on investment.
Buying a commercial or business property
People up and down the nation remortgage to buy a property for their company or business. Whether you’re looking to set up a brick-and-mortar store or offices, certain lenders will consider you for a remortgage.
Being a landlord
Becoming a landlord is arguably the most common reason people want to remortgage to buy another property. Here are the three main scenarios that are most common when remortgaging to become a landlord:
- Holiday property: If you want to invest in a holiday property, you can apply for a specialised mortgage that allows short-term lettings.
- Rent your current home out and move into a new one: If you want to rent your existing home out and move into your new investment, you’ll be able to alter your existing mortgage through the current buy-to-let system.
- Buy a second property to rent out: If you want to stay in your current home and rent out your new investment, you can make amendments to your existing mortgage terms or apply for a remortgage with buy-to-let allowances.
Every one of these situations is feasible for a remortgage. You can either apply for a full remortgage or opt for a second charge on your existing (main) property.
Ready to start your property investment journey?
Realistically, you can hold up to three mortgages at any one time, provided you have the funds to cover your monthly costs comfortably.
Unless you’re in a situation where the remortgage on your current home is enough to buy your second property outright, you’ll have two mortgages to pay. Here, you’ll use the equity released from property one as the mortgage deposit for property two. In some cases, you may also end up applying for three remortgages. Let’s explore:
| Number of Remortgages | Situation |
|---|---|
| One | If there's sufficient equity in your primary property to release funds to clear any existing mortgage balance and secure a second property in full, you'll only have one remortgage tied to your original property. |
| Two | If there's enough equity in your original property to replace the first mortgage and release enough funds to serve as a sufficient deposit on a second, you'll have a bigger mortgage on property one and a second mortgage on property two. This is the most common scenario we see. |
| Three | Here, you'd apply for a second charge remortgage (also known as a 'secured loan') on your original property to leave your existing mortgage in place. In this case, the funds released would be used as a deposit for a third mortgage to buy your second property. |
FYI: It’s worth noting that loan-to-value rates in a second will usually be as high as your original mortgages. Typically, you’ll be expected to pay around 20% of your new property’s value and use the equity from your existing property to fund it.
Depending on your needs, you may also have to deal with different mortgage types. For example, if you want to become a landlord, you’ll need to secure a buy-to-let mortgage on your second property. That means your current home will remain as a resident repayment mortgage and your second mortgage will be set up as an interest-only buy-to-let mortgage. I recommend working with a trusted mortgage broker to discuss your unique circumstances and navigate the process step-by-step.
Remortgaging: is it a good decision for you?
At this point, you might be wondering whether remortgaging to buy a second home is right for you. As long as you have the right motivations and a stable financial situation, remortgaging can help you achieve your property investment goals.
According to Paul Adams, sales director at Pepper Money
There’s expected to be a resurgence of remortgaging in the UK this year. Sharing his thoughts in the Financial Reporter, the expert said:
“We firmly believe that 2025 will be remembered as the year that remortgaging made its return. The resurgence of the remortgage is a huge opportunity for brokers with more customers needing professional advice. We would encourage you to reconnect with your customers and show them how a remortgage can unlock new opportunities to achieve their financial goals.”
While external remortgaging (replacing your existing deal with a new one) will likely be the most significant trend this year—and beyond—remortgaging to buy a second home is also expected to see a resurgence.
Before you commit to any remortgaging decision, I recommend:
- Exploring market values in the area you want to buy
- Using a remortgage repayment calculator to ensure you’ll be able to cover your costs long term
- Ensuring you have a budget for refurbishments, unexpected maintenance issues or periods of time when your property is vacant (if you’re looking to become a landlord)
- Speaking to a trusted property investment expert or mortgage broker
While the rate of remortgaging approvals saw a sharp decline in early 2024, there was a steady rise from July onwards. In September, remortgage approvals in the UK reached 30,760. This trend shows that the property market is starting to gain momentum and if you’re in a position to invest in a second property, this could be a good time to strike.
Remortgaging to buy a second home can be long-winded and complex. But with enough knowledge and professional guidance, the entire process will run as smoothly as possible. For your reference, here’s the remortgaging process in a nutshell:
Remortgaging Checklist
Now that you know the essential steps of remortgaging to buy a second property, let’s dig a little deeper into some of the financial aspects associated with the process.
Your current home’s level of equity
As I’ve discussed, most people use the equity from property one to pay for property two. In this instance, lenders will assess the equity you have in your current home to make a decision.
You can calculate your existing level of equity by deducting what the balance remaining on your current mortgage compared to your property’s existing market value. For example:
- Market value: £280,000
- Remaining mortgage balance: £140,000
- Equity available: £140,000
In most cases, your equity will be presented as a percentage (in the calculation above, the equity percentage is 50%). Almost all lenders will only consider you for a remortgage or second mortgage if your loan-to-equity value is between 80% to 95%.
For second charge mortgages, a larger portion of lenders will approve with a loan-to-equity value of 95%. But in any case, it’s worth noting that the higher your loan-to-equity percentage, the less likely you’ll be to secure a favourable deal on your remortgage.
Your current level of income
Your household income will also have a significant impact on the size of your mortgage. Most lenders will approve a mortgage of four-and-a-half times your salary or income while others will stretch to six-and-a-half times your salary or income.
Many people overlook this point, but your income isn’t limited to your salary—most lenders will also accept the following when calculating your overall household income:
- Regular workplace bonuses
- Tax credits
- Child benefits
- Consistent maintenance payments
Always work with your lender or broker to ensure everything is accounted for in your annual income declaration to increase your chances of securing a favourable remortgage deal.
Affordability and credit status
Once you’ve established your income in full, you’ll also be assessed for affordability. Essentially, your affordability is calculated by deducting all of your outgoings from your total annual income.
Before approving a second mortgage or agreeing to inflate your existing mortgage payments, lenders will look at your income and outgoings with a fine-tooth comb.
Your level of affordability will have a big influence on the type of deal you’re offered or whether you’ll be approved at all.
You should also know that mortgage lenders will perform a credit check. If your credit status is poor, you’re unlikely to be approved for a second mortgage as it’s a huge financial responsibility.
If you do have a credit rating that needs improvement, you can take measures to improve it—even three to six months can make a big difference.
I hope the advice I’ve given in this guide has made the process feel a little less daunting and answered the question, “Can I remortgage my house to buy a second home?”
Whatever your reason for wanting to invest in a second home, we’ll help you source the best investment for your situation. At The Property Sourcing company, we deal in a range of property investment types, including:
- Renovation investments and houses to flip
- Below market value properties
- Buy-to-let properties
- Commercial properties
- Student properties
- Supported housing investments
Our property sourcing specialists will find you the ideal investment for your needs and budget. We’ll also handle the entire process for you from start to finish and provide any advice you need along the way.
Are you ready to find a second property that ticks every box? Invest with us today.
Ready to start your property investment journey?
Yes, you absolutely can. It’s possible to remortgage your existing home to fund a second property. In most cases, you’d use a portion of the equity from your current property to put down a deposit for a mortgage for a second property. Naturally, there’s more than one way to remortgage your home to buy another property and individual motivations or circumstances to consider. It’s always worth navigating the process with a property expert or professional mortgage advisor.
It’s completely possible to remortgage your existing home or property to invest in a buy-to-let property. Many lenders offer specific interest-free mortgages for people looking to become landlords; there are a mix of other mortgage products to consider, too. To source the best possible deals or products for your potential investments, (again), I recommend working with a property investment specialist or mortgage broker.
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