Can I borrow money against my house to buy another property?

If you wish to buy another house—whether to rent out, use as a second home, provide accommodation for your children, or for any other reason—borrowing against your current home can be an effective way to raise the necessary funds.

A common question people ask is: Can I borrow money against my house to buy another property? The answer is yes, and there are typically three main ways to do so:
    1.    Taking out a further advance from your current lender.
    2.    Remortgaging your property—repaying your existing mortgage and securing a new one for a higher amount.
    3.    Taking out a second charge mortgage (also known as a second mortgage) from a different lender alongside your main mortgage.

Borrowing in this way can offer several advantages, but each option comes with its own risks and conditions. It’s essential to speak with an Independent Financial Advisor to determine which route is best for your personal financial circumstances and long-term goals.

Benefits of using borrowing against your main home to buy another property

There are two main benefits to taking out further borrowing on your existing home, compared to borrowing against the new property:

1. It can allow you to borrow more - for example if the equity you have in your property is a lot more than the value of the property you wish to buy or if this is an alternative to your children on a low income applying for a mortgage.
2. It can allow you to access a better interest rate - especially when compared to many buy-to-let mortgages, which tend to have relatively high interest rates.

There may also be other benefits depending on the circumstances, such as allowing you to buy a property to renovate that is currently considered unmortgageable e.g. because it does not have a functioning kitchen and bathroom.

How further borrowing on your home works

All of these options work similarly to a standard mortgage - you borrow money secured against your home and the amount you can borrow is determined by the value of the property and how much you can afford to repay.

Your lender will normally need to carry out a valuation and affordability checks before determining how much you can borrow. It is often possible to take your combined borrowing up to 90% of a property’s value, or even more in some cases.

When taking out further borrowing, you will usually need to have a solicitor act for you to review the mortgage offer and ensure your interests are protected.

Who can take out further borrowing?

In theory, anyone who already owns their own home can apply for further borrowing. However, to be able to raise enough to buy a second house, you will normally need to have a significant amount of equity built up in your current property.

To be eligible, most lenders will want you to have owned your current home for at least 6 months and be up-to-date with all of your mortgage payments. Specific requirements vary between lenders, however, so it is important to familiarise yourself with the different options when considering whether you will be able to get a second charge mortgage.

Get reliable conveyancing for buying a house

Bird & Co Solicitors is a long-established law firm offering conveyancing services for properties across England and Wales from our 3 offices in the East Midlands.

With decades of experience in all types of residential property, we make buying a house or flat as fast, smooth and cost-effective as possible while keeping your interests protected. We can also help you with all of the legal aspects of taking out a second charge mortgage on your current home. We are accredited by the Law Society’s Conveyancing Quality Scheme reflecting the high quality of our residential property services.

To find out more about our conveyancing services for residential property, call us today on 01476 591711 or use our contact page to find details of your nearest office.