How Many Mortgage Products Can I Have Simultaneously?
Do you have a residential mortgage, perhaps a buy to let property, and a holiday home - and find it tricky to secure another mortgage because you already hold several products? We'll explain how multiple mortgage lending works and the maximum number of products you can have.
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Error: Yearly income income must be between £1 and £10,000,000.
Error: Regular bonus must be between £1 and £10,000,000.
Based on your yearly income,
you may be able to borrow
Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.
Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.
Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.
How Many Mortgage Products Can I Have Simultaneously?
It is possible to have multiple mortgages, provided you can demonstrate that you can afford to keep up with the repayments.
In this guide, the Revolution Brokers team explains how second mortgages work and what criteria a lender will assess in deciding whether to approve your application.
For more help with finding an additional mortgage, contact the Revolution team at 0330 304 3040, or email us at [email protected].
What Will a Mortgage Lender Check on a Second Mortgage Application?
Lenders will primarily need to look at your income and existing debt to ensure you can afford to repay your new mortgage alongside any existing products.
They will also assess:
- Your credit file - each lender has different policies about minimum credit score requirements and typically will need to see a clean credit file or few serious issues to consider lending many mortgage products.
- Their risk exposure - some mortgage providers have caps on how many loans one individual can have with them. That might mean you cannot take out a further mortgage with your existing provider but would be easily approved by another with whom you do not have any other debts.
- The reason for the purchase - a lot depends on whether the property is a buy to let, but lenders also need to ensure there aren't any plans to buy a second home posing as a rental investment with the intent to live there.
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Is There a Limit on How Many Buy to Let Mortgages I Can Have?
Not specifically, but some lenders will have a limit of one or two mortgages. Others have no caps at all, provided the rental income covers the payments.
Many lenders regard multiple buy to let mortgages in the same area as a higher risk. That is because were rental prices to drop in that area; it could instantly affect your ability to keep up with the repayments on each mortgage.
Lenders will need to see minimum rental income coverage to see that the income will comfortably cover the BTL mortgage interest.
That is usually 125% for lower tax bands and up to 150% if you are a higher-rate taxpayer.
For example - say you want to borrow £50,000 on a BTL mortgage; you might get a very different response from two different lenders:
- Lender A requires rental income to cover 150% of the mortgage interest, calculated at 4%. They need to see a rental income of £250 per month to approve the mortgage, with the monthly interest costing £167.
- Lender B applies a 6% nominal interest rate and needs to see a rental income of 125% of the monthly mortgage interest. They will approve the application as long as the monthly rent is £313 or more, against a monthly interest charge of £250.
As you can see, a lot depends on the lender's policies and the nominal interest rate they use in their affordability calculations.
Most landlords won't need to prove any other income streams to qualify. Still, new landlords can face additional requirements - in which case an independent broker can help identify the most suitable mortgage lenders to apply to.
Is There a Limit on How Many Homes I Can Own?
If you want to borrow a second mortgage, you will need to identify your primary residence and why you want to buy a second property.
Residential mortgages are cheaper than buy to let loans, so lenders need to be confident that the reason for the purchase is legitimate.
Most lenders will accept two residential mortgages if you want to buy a weekend property or family home.
However, suppose you already have a mortgage. In that case, the lender will need to know your income and the outgoings on all other debts to calculate whether you have sufficient expendable income to keep up with both repayments.
Can I Have Multiple Mortgages on the Same Property?
Yes, you can have a second or even third charge mortgage or home loan against the same property - but the lender will carefully assess your affordability, the LTV, and why you want to take out an additional mortgage.
You can also have multiple commercial mortgages. This scenario is typical for businesses that let out numerous commercial units or work from several different sites.
Commercial mortgages usually require a higher deposit of around 25% to 30%, and lenders will need to see that you can afford multiple mortgages.
Independent Advice on Multiple Mortgage Applications
If you'd like to buy a second property or take out an additional mortgage, there are many different products and lenders to choose from. The right option for you will very much depend on what you want to buy, for what purpose, and your circumstances.
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As specialist mortgage brokers for a huge variety of applicants, the whole-of-market consultants at Revolution provide access to an exceptional range of lenders, products and mortgage deals. That means you get the advantage of professional negotiation and broker-exclusives through an established lending network to ensure we always find you the most competitive mortgage available.
The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.
We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.