Second Mortgage Calculator (Oct 2021)
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Are you looking to get the most out of your home equity?
Well, we’ve got a secret to share! Getting a second mortgage could be the key to true financial freedom.
We’re here to help you. We’re giving you the FEE opportunity to calculate how much cash you could unlock from your home as a second mortgage.
This article will help you discover:
- What’s a second mortgage calculator, and how it works.
- A simple explanation of second mortgages.
- If you could qualify for a second mortgage.
Our dedicated team of experts spends days and nights combing the market, looking for the latest equity release news. We want you to have a financially free life.
It’s for this reason that we’ve used our resources to create the most accurate second mortgage calculator on the market.
Now, are you ready to discover how much you could be eligible to unlock for your second mortgage dreams? Find out now!
What Is a Second Mortgage Calculator?
A second mortgage calculator is a tool that helps you determine how much equity you could unlock through a second mortgage on your home.
Lenders will use this calculator to help determine your monthly repayment requirements. The funds can be used on home improvements or other ways to increase your property’s value.
While some lenders will use their own calculators, we’ve built this product to be available to lenders, and you, the general public.
Our Oct 2021 calculator is totally FREE and easy to use, as we’ll explain next.
How Do I Calculate the Amount I Can Borrow on a Second Mortgage?
Using our second mortgage calculator is simple!
All you need to do is enter a few details about your property value, and some personal information, and our expert team will email you a quote.
The whole process will take you about 8 seconds.
What Do Mortgage Lenders Look For?
When opting for a second mortgage (otherwise known as a second-charge mortgage), the lender will likely assess your application far more carefully. They’ll need to ensure that you can afford repayments on both mortgages.
Note that each lender will have different mortgage criteria. Therefore, the information you’re required to supply may vary.
How Does Getting a Second Mortgage Work?
A second mortgage loan won’t come from your original lender. Interestingly, the first lender will always be the priority. In a nutshell, if the home is sold, the original lender with have first access to the home equity.¹
Like with any mortgage that requires payment (unlike equity release), you’ll need to repay your second mortgage, or you could face losing your home.
Why Take Out a Second Mortgage?
There are many reasons as to why one might opt for a second mortgage. These include:
- If you don’t qualify for other forms of unsecured borrowing. This could be as a result of being self-employed.
- If your credit rating² has dropped since you signed your original mortgage. If you switch mortgages to pay your mortgage and additional debt, you could end up paying much higher interest rates. With a second mortgage, you’ll only pay additional interest on the new loan amount.
- Your current mortgage might come with crippling early repayment charges. Therefore, it might be a better option to take out a second mortgage.
What if You Move Home?
In most cases, if you move, you might have to pay off your second-charge mortgage.
However, some lenders may allow you to transfer the loan to your new property.
When Is a Second Mortgage Not a Good Idea?
What’s the Difference Between a Second Charge Mortgage & Remortgaging?
Remortgaging is when you take your current mortgage, and switch it to a new deal. You can do so with either your current lender, or a new lender of your choosing. Remortgaging is used to find a better deal or to access more money.
A second mortgage is a whole new deal. If you select this option, you’ll have 2 loans to pay off on your home.
How much will lenders be willing to offer on a second-charge mortgage?
The amount you’ll have to access through a second mortgage will depend on the equity available in your property. The current mortgage on your home will then be subtracted from the total equity, giving you the final results.
You can usually borrow between 75% and 100% of the equity available in your estate, but the amount could differ from one lender to the next.
Once you know the maximum, you must speak to a financial adviser who can guide you on how much you should borrow. They can also educate you on the second mortgage alternatives.
Are Second-Charge Mortgage Interest Rates Higher?
Second mortgage interest rates are usually higher. Before making any decisions, you must ensure that you can afford the repayments.
However, note that second-charge mortgages can be cheaper than other forms of borrowing.
Got Questions? Check These First
Can You Buy Another House if You Already Have A Mortgage?
If you took out an equity release mortgage and have an existing mortgage on your home, when you get the funds, you’ll first have to settle your mortgage balance.
After that, you can decide to do whatsoever with your capital which includes buying a second home or vacationing in Kenya.
How Much Can You Borrow For A Second Mortgage?
Well, the amount you can get from the second home or holiday home mortgage typically depends on the amount of equity you have on your estate.
However, the capital you’ll get will also vary from plan provider to plan provider – but according to research, you can get about 75% to 100% of the potential equity of your second home.
How Does A Second Mortgage Work?
Well, the second home mortgage is an equity release product that allows you to unlock the value tied up in your second home. However, the estate should be available for the sole occupancy of the homeowner, and your lender will only allow you t let it out for a maximum of four weeks successively. You also have to use it for a minimum of four weeks each year and have no formal contracts or any assured shorthold tenancy agreement in place.
To qualify for this loan type, you need to be aged 55 and above, own a house worth more than £70,000, but not over £6million. Your second estate should also be situated in either England, Scotland or Wales.
How Hard is it to Get A Second Mortgage?
It can be somewhat challenging to take out the equity tied up in your second home, unlike when taking out capital from the equity tied up in your principal residence.
However, depending on the plan provider you choose, it can be a seamless process, and you can enjoy your retirement by getting some extra cash from the equity tied up in your second home in England.
If you’re looking for ways to unlock further cash from your home, a second-charge mortgage should definitely be considered. However, this type of mortgage needs repayments, so you can expect to undergo affordability checks.
Use our second mortgage calculator to see how much equity you could be eligible to unlock through this method. Once you have your results, speak to your financial adviser, who is qualified to advise you further.
Finally, if you’re 55 or older, or have elderly parents who are looking for some extra cash, discover everything there is to know about equity release and how it could benefit you in Oct 2021.
Editorial Note: This content has been independently collected by the SovereignBoss advisor team and is offered on a non-advised basis. Sovereignboss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations.
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Most people are using equity release as a means of retaining the use of their house while also obtaining a lump sum or a steady stream of income. Get matched with an expert and check your eligibility for equity release options.
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