Barclays change lending rules for applicants with another residential mortgage in the background
Barclays for Intermediaries has increased the amount of money applicants with another residential mortgage in the background can borrow.
If applicant(s) have an existing background residential mortgage that will not be redeemed on completion of their new property, Barclays will now lend up to 90% of the property value for residential purchases and remortgages. This is an increase from the previous cap of 80%.
The standard maximum loan amounts through Barclays for 90% loan-to-value purchases for houses (£640,000) and flats (£310,000) apply. Applicants with existing permission to let approval will remain capped at 80% loan-to-value.
Aaron Strutt, product director at Trinity Financial, says: “More lenders are issuing a second residential mortgage where there is a relationship breakdown and the property needs to be maintained, also, if a second residence is required for work purposes.
"Both mortgage payments would need to be included as a commitment, so it can be hard to borrow the amount required from many borrowers. As lenders use different affordability calculations and have varying maximum loan sizes, the loan amounts can vary significantly. Our brokers can research the market for you."
Two residential property FAQs
Can I have two residential mortgages?
A residential mortgage is generally meant for your main home (where you live). If you want a loan for a second home (holiday home, pied-à-terre, or somewhere for family), some lenders will allow a second residential mortgage.
If you’re buying a property you intend to rent out, you usually need a buy-to-let mortgage instead of a residential one.
Lender considerations
Each lender will look at: Affordability: They’ll assess your income and outgoings to ensure you can cover both mortgages. Loan-to-Value (LTV): Second residential mortgages may have stricter deposit requirements. Credit history: A good credit profile is essential. Purpose of the property: You’ll need to be clear whether it’s for personal use or rental.
Common scenarios
Buying a holiday home. Having a second home for work (e.g., weekly commuting). Buying a home for a family member to live in (sometimes allowed under a residential mortgage, sometimes not).
Tax and costs
You’ll likely pay higher stamp duty/land tax on a second home. You must factor in maintenance, insurance, and utilities for two properties. If you later rent out one of them, different tax rules apply.
Which other major lenders permit borrowers to own two residential properties?
Many of the big banks and building societies will offer borrowers two residential mortgages, including NatWest, Halifax, and Santander for Intermediaries. HSBC for Intermediaries can provide mortgages for second homes if both loans can be serviced entirely from the applicant's salary, subject to its standard credit assessment. This is limited to one property in addition to the applicant's primary residence."
Call Trinity Financial on 020 7016 0790 to secure a second mortgage or book a consultation
Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage
Get started today
Speak to one of our mortgage experts. Book an appointment to come and see us or request one of our experts to call you.
