Is it Hard to Get a 2nd Mortgage?
Yes, it can be hard to get a second mortgage. Most lenders in Australia don’t like approving applications for second home loans. Second mortgages tend to be seen as high-risk because borrowers tend to make them a lower priority. If they can only afford to repay one mortgage, they will choose to repay the first one instead of the second one.
Therefore, most lenders place tight limits on the amount you can borrow if you apply for a second mortgage, or they will deny your request completely.
Items to Keep in Mind When Applying for a Second Mortgage
Even if you do find a lender who will approve you for a second mortgage, there are some items you need to keep in mind:
- Before applying for a second mortgage, you need to get approval from your current mortgage lender. To get your lender to assess your request, you may have to pay a fee of a few hundred dollars.
- You may be able to borrow up to 95% if you take out a second mortgage with your current mortgage lender.
- If you take out a second mortgage with a different lender, you may be able to borrow 85%.
- If you’re self-employed or are non-traditionally employed and need a low-doc loan, you may only be able to get a second mortgage through a private, non-bank lender.
However, some lenders will approve you for a second mortgage. If you do need to apply for a second mortgage, the brokers at Mortgage House can help you find one with competitive interest rates. In addition, if you are self-employed, we can help you get a second mortgage, even with a low doc loan.