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How can a lifetime mortgage help me buy a second home?

If you’re over 55 and dreaming of a second home, a lifetime mortgage could help make it happen. By unlocking tax-free cash from your main property without selling it or having to move, you could get the extra cash you need to buy a second home.

How much you can borrow depends on your age, home value and health. Typically, the older you are, the more you can release. The funds can be used to buy a second property outright or as a deposit.

You’ll still own 100% of your home and have the right to live there as long as you wish. There are typically no mandatory monthly repayments, with the loan and accrued interest usually repaid when you pass away or move into long-term care.

Why choose a lifetime mortgage to help fund a second home purchase?

Thinking about buying a second home? You’re not alone. According to the Government’s most recent English Housing Survey, there were 809,000 second homes owned by households in England between 2021-22.

But when it comes to stumping up the cash for one, plenty of homeowners aged 55+ find themselves ‘asset rich, cash poor’ – their house holds their wealth, but it’s not exactly ready to spend. That’s where a second home lifetime mortgage can come in handy.

It means you could finally achieve the dream of buying a second home – whether that’s a coastal cottage, a static caravan in the Lake District, a villa abroad, or even a flat in town.

You’ll still own your home and can live there as long as you like, without the stress of arranging a traditional mortgage or reapplying every few years. There are no mandatory monthly repayments, and any interest payments you choose to make are entirely voluntary, giving you plenty of flexibility to manage your finances.

It could be a good option if you want:

  • Tax-free cash to help buy a second home.

  • No obligation to make monthly repayments, with the choice to pay interest voluntarily.

  • To keep full ownership of your main home and continue living there.

  • To be able to pay back your original loan early if you wish - although early repayment charges may apply.

Five star reviews from happy customers

Taking out equity release is a big decision, so it’s good news that our selected advisers enjoy great feedback and an ‘excellent’ Trustpilot rating from customers who have used the service.

Highly recommended

Explained everything from the first phone call we made to completion, giving us time to understand all the options. Everything went smoothly - would highly recommend.

Brilliant service

The service we have received so far has been brilliant. The documentation came through very quickly, but we have not been put under any pressure to make a decision.

Help was always on hand

Everything explained to me every step of the way and always time to ask questions which are always fully answered. I never felt pressured to make a decision but help was always on hand.

What options do I have with a second home lifetime mortgage?

As we have seen, a lifetime mortgage could enable you to unlock money from your main residence to help fund another home – whether that’s a coastal cottage, a city apartment near family, or even a villa abroad. You’ll still own your main home, there are no mandatory monthly repayments, and any interest payments you make are entirely voluntary.

Second home lifetime mortgages have also previously been available that let you release money from a second home. Although typically unavailable at the moment due to current market conditions, they gave consumers two further options:

Release equity from a second home you already own

Some lenders have offered plans that let you free up cash from a second property you already own. This could be handy if you want a financial boost without selling, remortgaging, or tapping into your main home’s value. Any cash you unlock would be tax-free and yours to spend however you like.

Release equity while buying a second home

A more niche option has been to arrange equity release on a property you’re in the process of buying. This would help cover a shortfall without the hassle of a traditional mortgage or monthly repayments – though you would not be able to have both a standard mortgage and equity release on the same property.

Although these two options aren’t currently available, rest assured that the team at Compare More will be keeping a close eye on developments and we’ll update this page if anything changes.

How much can I release?

How much you can release depends on a number of factors:

  • Property value: There will be a maximum release based on a percentage of your home’s value.

  • Your property: Your current property’s tenure (freehold or leasehold), location and type of construction.

  • Your age: The older you are, the more you will be able to borrow with a lifetime mortgage. Someone aged 55 will typically be able to release around 20% of their property’s value, rising to over 50% for the oldest applicants.

  • Your health or lifestyle: An enhanced lifetime mortgage may let you release more if you are living with certain health conditions or make certain lifestyle choices such as smoking.

Things to consider

As with most decisions about financial matters, you do need to weigh up the pros and cons of a lifetime mortgage to help fund a second home purchase. Although lifetime mortgages can help you to do more of the things you want, there are potential disadvantages to consider:

  • Unlocking your property wealth will reduce the size of inheritance you can leave. The loan plus interest is repaid from the sale of your home, so there’s less equity to pass on.

  • If you leave the interest to roll-up each month, the amount owed can grow quickly. Lifetime mortgages work on a compound interest basis, where interest is applied to the loan amount plus any interest already accrued.

  • When you release money, it might affect your eligibility for homecare funding and other means-tested benefits.

  • Early repayment fees will typically apply should you wish to repay the loan plus interest early. However, lenders may waive these fees in some circumstances.

  • If you gift some of the money you release to family or friends, they may be liable to pay inheritance tax when you pass away.

How to get your second home lifetime mortgage quotes

At Compare More we work with specialist partners who bring you quotes from the UK’s leading lifetime mortgage providers. To show quotes that match your circumstances and needs, we’ll need to know:

Your property type and value

The type and value of your property will impact how much you can release: the higher the value, the more you can release. We also ask whether you have an outstanding mortgage, as you will need to use the money you release to clear your existing mortgage.

The reason you are considering equity release

This can help tailor the service to your circumstances – but if you’d rather not say at this stage, just select ‘other’.

Your personal details

You’ll need to share details like your age and postcode as these will also affect how much you can release. We also need some contact details so we can get in touch with information about your quotes. 

Equity release guides

Answering your questions about second home lifetime mortgages

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Explore your options and find the equity release plan that works for you.

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Second Home Mortgage

Finance a second property, whether for holidays, work or investment opportunities.

Page updated on 12th September 2025, Reviewed by Richard Groom