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Advantage of remortgaging to buy second home?

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Hi, I'm trying to understand the difference between these two situations. Suppose I own a house outright (worth 100) and have 20 in cash. If I want to buy a second home that's also worth 100 without selling my first one, I can either:
  1. Use a single mortgage to buy the second home, with 20 in deposit and 80 in mortgage (80% LTV), or
  2. Use two mortgages, remortgaging the first home, with 60 in equity and 40 in mortgage (40% LTV) for both homes.
Which of two is more common in practice? I guess that using two mortgages may be a little cheaper because of lower LTV and hence lower interest rate. But I'm not sure if remortgage rates are the same as normal mortgages.

Comments

  • Flugelhorn
    Flugelhorn Posts: 7,311 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    depends what you to use the second house for - I did this once to buy a holiday let (in the days when that was far less hassle than now) - better to borrow against main house for that as the "holiday let" mortgages were more expensive
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