Second Mortgage

Posted on 23 June 2011 by Sarah

I have a joint mortgage of £370,000 with my sister on a property worth approx £560,000.  My sister's family and my parents live in the property as well as me, but I would now like to get a separate property for myself.  Is it possible for me to get a second residential mortgage and if so what am I likely to be able to borrow?  At the moment I have £20,000 savings and earn £60,000 per annum, I would still contribute to the first mortgage at approx £700 per month and have no other outstanding debts.


There are two ways lenders will treat your existing mortgage when calculating how much to lend you on a new purchase.  They will either want your income to cover both the mortgage debts added together and use a simple income multiplier or they will take your existing mortgage payment as a commitment and then work out how much you can afford to pay on top of that.

Using the first method I do not think you will be able to borrow more because the current mortgage debt is over 6 x your annual income.  The second method is likely to be more generous, although I fear most lenders will take the total monthly mortgage commitment rather than just your share of it.  This is because a mortgage is a joint and several commitment and if the other parties to the mortgage didn't pay you would be liable for the whole amount.

Depending on your personal circumstances I think we should be able to find a lender who would be willing to take just your proportion of the monthly commitment into account and that this would mean you could be looking towards raising up to £175,000 on your own.  Please call 0344 346 3672 to talk to one of our independent mortgage advisers who will be able to offer further advice on your situation.


Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

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