Thank you so much for answering my questions, you have been very helpful and I feel in a much more informed position now.

The reason I suggested a potential buy to let on your current home (or accessing a "Consent to Lease") is that this would effectively exclude any mortgage you have on this property from the affordability calculations on the new house that the lender would apply.

To give a rough rule of thumb calculation you would get 4 x income.

4 x £125,000 = £500,000

but if you take into account your current borrowuing this would mean you have a maximum borrowing of £170,000 for your new home and if you add to it your maximum £40,000 deposit this would mean that the maximum purchase price would be £210,000.

If you are able to exclude the home mortgage through buy to let / consent to lease and lets say this has a value of around £200,000 then then the affordability is a little more generous.

4 x £125,000 = £500,000 - £130,000 (second home mortgage) = £410,000 affordability.

Taking a buy to let would only be an option if you were no longer tied into your lender, it would be worth speaking to your lender and suggest that you may look to sell and do not want to tie yourself in for a long term and can they still offer you consent to lease. it may cost you £100 per year to access this (it may cost nothing) and of course you are not forced to let the property but it will give you access to a loop hole that would allow you to access a larger affordability for your new home. This is a short term solution only though as lenders will generally only offer CTL for 2-3 years maximum.

To go through your other questions.

Yes it is illegal to hold more than one residential mortgage as it is designed to be used against your main residence. You cannot have two main residences so to obtain a second mortgage designed to be a main residence is fraudulent and the lenders can impose some stiff penalties such as calling in the mortgage immeduiately or fraud markers on your credit file which will hagve a significant effect on the products and price if you try to obtain credit or any kind of insurance.

Your holiday home has a slightly different tye of mortgage against it. By design, when you bnormally buy a gholiday home it normally will state somewhere within the deeds that it is a holiday home and that it is not to be used as a residence for more than 11 months of the year and as such it cannot be a permanant residence, it could potentially be your main residence but it cannot be a permamant residence therefore it does not qualify under the lenders main residential mortgage rules althougyh often they will offer regular mortgage products to be taken on holiday homes. lenders often do quirte a lot of research on the properties before offering a mortgage as they need to make sure that any restrictiomns that may be placed on the property will not potentially affect the saleability of the property if you decided not to pay your mortgage.

There is no easy way around this. The above suggestion is just that, a suggestion, but it is legal and within the lenders criteria and will offer you a broader area to gain your mortgage within. In fact without taking CTL or looking into a buy to let you may find that lenders are not so willing to help you with another residential mortgage.

Thanks for your very comprehensive reply, I'm not sure I understand why we must switch to a buy to let when we really have no intention to rent, original family home currently serves as much needed storage facility as well as a place to stay when visiting, we had considered renting it out but decided against this as it is an extremely well finished house and we have concerns that a tenant may not care for it as we wish. Is it illegal to have more than 1 residential mortgage or is it that lenders only want to offer better rates on one mortgage per person/ family. Considering that, we're actually not sure what sort of a mortgage we have on our holiday home but had no difficulty whatsoever in accessing a mortgage for that purchase, I suppose though at the time lenders were happy to lend anybody anything. Is there any other way around it?

Lenders will only allow you to have one residential mortgage as this mortgage is designed to be on your main residence. If you are looking to purchase a new home then this would become your main residence so the lenders would want you to change the mortgage on your existing main residence (house sat property) and turn it into a Buy to Let mortgage so that you can then take out a new residential mortgage on the new property.

That’s the nuts and bolts of it but it doesn't always work as cleanly as that.

If you have a mortgage that is still within its original fixed or tracker rte then you would be forced to pay a penalty to break that contract and on £330,000 (understand this may be a1st and 2nd property mortgage value) this is going to be quite a hefty financial penalty assuming a minimum 2% penalty. Because of this most lenders will allow you to take out what is called "Consent to Lease" which means that the lender will officially allow you to let out the property for financial rental return. Now while you say that your property is being house sat by a family member it may still be wise to follow down the consent to lease route as for one this may allow you to rent the property should you wish to but also the lenders will assume that the mortgage or a god portion of it will be covered by any potential rent that could be gained by the property being let (a surveyor will assess the potential rental value of the property). If the assessed rental of the property is able to cover the interest only value of the current mortgage plus 25% (some lenders may charge this at a calculated mortgage rate of 6%) then the property will be deemed to be self sufficient.

If the property is deemed as self sufficient then this means that the new lender will not use the current mortgage value of this property against your affordability when assessing how much you can borrow. It means that this could greatly increase how much you could borrow as your original home mortgage will be deemed to be paying for itself so you won't need to keep paying it out of your own income.

Bearing all this in mind I don't see why a lender would have a problem allowing you to take a 3rd mortgage. if you can show the 1st property to be self sufficient or if you can swap it to buy to let (if it is out of its contract) then you will only have the 2nd mortgage to pay for out of your own income and assuming that if it was 50% of your mortgage outgoings then at £165k this would most likely still allow you to borrow in the region of £400k+.

As always.....best consult with a mortgage broker or financial adviser and they will be able to give you more definitive figures and information.

Because of work commitments we have had to relocate. Currently living in rental but extremely keen to buy, will likely be located here for at least 10- 15 years. Have 2 homes, 1st is original family home, 2nd is holiday home. Ideally would sell 1st but in this climate are reluctant to as would not see much profit if any after costs. A family member is housesitting and will continue to do so for as long as we wish. Together my partner and I have a joint income of £125000 approx, we have approx £40000 in savings and wonder if a lender would consider us for a 3rd mortgage and if so up to what value. At present we feel we can comfortably afford both mortgages and considering we are paying rent and thankfully are able to save some money each month we could manage a third. Please bear in mind that expenses need to be paid from the savings so not all can go towards a deposit. Current mortgages total £330000 interest only.