Securing a second home mortgage in Cornwall can be rewarding yet demanding, given the region’s appeal for coastal retreats, family getaways, and occasional holiday use.

Introduction

This guide covers the essential requirements, costs, and process for obtaining a second home mortgage in Cornwall. It is designed for prospective buyers considering purchasing a second home in this highly sought-after region. The topic is especially important due to Cornwall’s unique local regulations, such as council tax premiums and planning restrictions, as well as the area’s consistently high demand for second homes. Understanding these factors is crucial for making informed decisions and successfully navigating the mortgage process in Cornwall.

Second home mortgage for a beautiful property in Cornwall.

Council Tax and Stamp Duty

Since the Covid-19 pandemic, demand for second homes in Cornwall has increased significantly, with many buyers seeking a second property for investment, lifestyle, or to maintain family connections. Owning a second house in Cornwall is seen both as an investment opportunity and a way to own a holiday home for your own use or as a legacy for future generations.

When considering buying a second home, it’s important to factor in council tax—Cornwall Council charges a 100% premium on second homes, effectively doubling the standard council tax rate. From April 2025, a 5% Stamp Duty Surcharge will also apply. Stamp duty for a second home is typically higher, usually around 3% to 5% depending on the property’s value, and additional stamp duty applies.

Deposit and Mortgage Types

At Fox Davidson, we specialise in second home mortgages, accessing specialist lenders who understand the unique aspects of Cornish properties, from stunning seaside locations to rural estates with partial agricultural elements.

A mortgage to buy a second home will usually require a more sizable deposit compared to a standard mortgage. Deposit requirements and mortgage types include:

  • Standard second home mortgage: Deposit generally 15% to 25%
  • Buy-to-let mortgage: Deposit typically starts at 25%
  • Holiday let mortgage: Deposit typically starts at 25%. A holiday let mortgage is a tailored form of finance for properties intended to be rented out on a short-term basis.

If you intend to let the property, you will need a holiday let mortgage or a buy-to-let mortgage, and interest rates for holiday let mortgages are typically higher.

Affordability and Lender Criteria

The underwriting process for second home mortgages is more stringent than for a main home, and most borrowers will need to utilise the services of an experienced mortgage broker or advisor.

Lenders will assess your overall financial situation, including how much equity you have in your main home, your current property, and any other debts or existing mortgage payments. You must declare your second home to your mortgage lenders and local council, and to avoid the 100% council tax premium, some owners register as holiday lets, subject to specific letting requirements.

Obtaining an Agreement in Principle (AIP) is necessary to show your borrowing capacity when applying for a second home mortgage.

Additional Costs and Tax Considerations

Owning a second home involves additional running costs, including:

  • Maintenance
  • Insurance
  • Potentially business rates if the property is let
  • Legal costs
  • Higher stamp duty
  • Maintenance expenses

Second homes can serve as an investment opportunity, potentially generating rental income or appreciating in value, but also carry double the market risk if property prices fall. Capital gains tax may apply when selling a second home, and income tax may be due on rental income.

Remortgaging your house to buy a second home by releasing equity from your current property is a common strategy, but lenders will assess your affordability carefully. Obtaining an Agreement in Principle (AIP) is necessary to show your borrowing capacity when applying for a second home mortgage.

In some areas of Cornwall, ‘Article 4 Directions’ may require full planning permission to convert a residential home into a short-term holiday let, and the Furnished Holiday Let (FHL) tax regime was abolished in April 2025, impacting the tax efficiency of short-term letting.

Location: Cornwall

Loan Amount:

Finance Category: Residential Mortgage

The Story

Client Background

Our client was a high-net-worth UK resident foreign national, originally from Singapore, working as a successful financial trader. With a strong base salary supplemented by vested stock options and trading income, he sought a luxurious coastal estate in Cornwall as a second home.

Property Details and Purpose

Valued at £4 million, the sprawling property featured extensive grounds, sea views, and partial agricultural land, making it ideal for family holidays, occasional stays, and potential limited letting when not in personal use. Some buyers also use second homes to help a family member with housing or as a long-term investment, and selling the property in the future could realise gains.

Borrowing Requirements

The borrowing requirement was £2.8 million on an interest-only basis to keep monthly outgoings low and preserve liquidity for his active trading activities. Remortgaging your house to buy a second home by releasing equity from your current property is a common approach. He prioritised flexibility, including penalty-free overpayments to reduce the balance when bonuses or profits allowed.

Why Fox Davidson

After researching specialist brokers experienced in high-value second home mortgages in Cornwall, he contacted Fox Davidson for our track record with non-standard properties and international clients.

We conducted a comprehensive review of his finances, confirming robust income proof, excellent credit, and substantial net worth. Lenders will look at how much equity you have in your main home and any existing mortgage payments to determine affordability. The client appreciated that a second home mortgage in Cornwall could accommodate his needs for personal use while allowing occasional rental income without switching to a full buy-to-let product.

Lender Selection

Our comprehensive market approach ensured we targeted lenders comfortable with large loans in remote coastal areas, where standard high-street criteria often fall short. The lender will determine eligibility based on income, equity, and overall affordability.

Cornwall’s property market remains highly desirable in 2026, with demand for second homes driven by lifestyle buyers seeking escape from urban life. However, lenders apply extra scrutiny to high-value coastal and rural estates, making expert guidance essential.

The Challenge

Unique Hurdles in Cornwall

Second home mortgages in Cornwall present distinct hurdles, particularly for substantial loans on non-standard properties. Many high-street lenders cap second-home lending or avoid remote locations due to valuation difficulties, resale risks in seasonal markets, and concerns over partial agricultural or mixed-use elements.

Underwriting Complexities

In this case, the estate’s remote Cornish position and agricultural components complicated underwriting, lenders required some commentary around the properties intended use. The client’s foreign national status (despite UK residency) added layers: some providers restrict non-UK nationals or demand extra income verification, especially when earnings include variable trading elements rather than salaried stability. The underwriting process for second home mortgages is more stringent than for standard residential mortgages, and most borrowers will need to utilise the services of an experienced mortgage advisor or broker to navigate lender requirements and identify suitable options.

Affordability Assessments

Affordability assessments were rigorous. Lenders stress-tested dual-property costs at higher notional rates (often 6-8%), factoring in the main residence mortgage, two council tax bills (with second-home premiums common in Cornwall), insurance for a high-value coastal property (including flood and unoccupied risks), and maintenance for extensive grounds. A mortgage to buy a second home will usually require a larger deposit but only around 10% to 15%| via a decent broker worth their salt.

Repayment Strategies and Lender Preferences

For an interest-only second home mortgage, repayment strategies needed to be robust, typically via sale of the property or other assets, with conservative loan-to-value ratios (around 75% max for large loans). Owning a second home involves additional running costs, including legal costs, higher stamp duty, and maintenance expenses.

The interest-only preference, combined with overpayment flexibility, narrowed options further. Many lenders impose early repayment charges or limit overpayments, while specialist providers for high-net-worth cases demand exhaustive documentation: proof of income sources, net worth statements, and clear explanations of the property’s occasional rental potential without triggering commercial criteria. Lenders view second mortgages as higher risk due to the responsibility for two sets of monthly repayments.

Navigating the 2026 Lending Environment

In the 2026 lending environment, with modest base rate expectations and cautious affordability rules, securing competitive terms for a £2.8 million second home mortgage in Cornwall required avoiding unsuitable high-street applications that could harm credit scores. Most mortgage providers will assess each case according to various criteria, including credit history and income.

Fox Davidson focused on boutique and specialist lenders experienced in premium Cornish properties, building a persuasive case around the client’s financial strength and genuine second-home intent.

The Solution

Securing the Mortgage

Fox Davidson’s targeted expertise delivered an excellent second home mortgage in Cornwall. We shortlisted boutique lenders specialising in large mortgage loans, presenting comprehensive evidence: detailed property reports addressing agricultural aspects, verified income and net worth, and a clear narrative on personal/family use with limited letting flexibility.

Mortgage Terms and Flexibility

We secured a £2.8 million interest-only mortgage at 70% loan-to-value, part fixed for an initial 2 years at a competitive rate reflecting market conditions and part floating rate with no ERC’s.

The product included full penalty-free overpayment allowances, allowing the client to reduce the balance opportunistically from trading gains without cost.

Completion and Client Benefits

Completion proceeded smoothly, with the lender satisfied after our detailed submissions on the estate’s valuation, use, and the client’s circumstances. The low monthly interest payments preserved cash flow for his professional activities, while the structure supported future flexibility, whether holding long-term as a family retreat or adjusting based on lifestyle changes.

Remortgaging to buy a second home can be a way to grow your wealth if the property increases in value, and capital gains tax may apply when selling, as second homes are considered investment properties.

The client achieved his goal of owning a stunning Cornish coastal estate without compromising liquidity or career focus. Second homes can serve as a good investment, potentially generating rental income or appreciating in value, but also carry double the market risk if property prices fall.

This outcome underscores our strength in high-value second home mortgages in Cornwall, navigating complex criteria to access the right lenders and terms. Owning a second home can help maintain family connections and provide a legacy for future generations. Using a specialist mortgage broker is essential to secure the best terms for high-value second home mortgages in Cornwall.

If you’re considering a second home mortgage in Cornwall, whether a luxury coastal property, rural escape, or family holiday home, Fox Davidson provides tailored, whole-of-market advice. Contact us for expert guidance on securing the best solution for your needs.