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Holiday let mortgages

Looking to borrow money to buy a holiday let property in the UK? We can help you!

 
 
 
 
  • Competitive rates and products, to keep your costs down
  • Quick responses, so you can get your plans started right away
  • Flexible repayment terms that work for you
  • Personalised experience with an advisor you can trust
  • Find out what you could achieve by calling our experts on 0800 032 3535 or email us and get your free quote!

Any property used as security, which may include your home, may be repossessed if you do not keep up repayments on your mortgage.

Holiday let mortgages

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grey house holiday lets

What is a holiday let mortgage?

 
 
 
 

Holiday let mortgages are a type of borrowing solution that allow people to purchase or remortgage properties, which are used to provide short-term accommodation to tourists or groups travelling on holiday, or individuals travelling for business purposes.

These solutions are very useful to investors who are looking to get into the holiday let market for the first time or those who are wanting to expand their property portfolio.

Whilst it can be hard work maintaining these properties, it can be a lucrative investment, which you can even use yourself for short-term stays. However, it is important to be aware that most lenders will only allow you to stay in the property for a maximum of 90 days a year. If you intend to reside in the property for more frequently than this, you may need to consider a residential mortgage for a second home – as this is likely to be viewed as your personal holiday home, rather than an investment property.

If you are looking for a flexible and competitive deal, our experts can help you. We have capital repayment and interest only solutions available, with a diverse selection of repayment terms ranging from 1 to 30 years.

What’s the difference between a buy to let and a holiday let?

 
 
 
 

These properties are very similar investment opportunities, as they both focus on the rental market.

Essentially, they both provide accommodation to individuals for a set period of time. The biggest difference between them is the length of the time the property is let out for.

With a buy to let property, you will usually have the same tenants in the house for a period of 6 months to a year. Often, tenants stay on in the property even longer than this, but it does depend on their contract with the landlord.

On the other hand, holiday lets are intended for much shorter stays, typically ranging from one night to a month. Therefore, the individuals staying in the property will change much more frequently.

Both types of investment properties can be really worthwhile if they are managed correctly.

If you’re interested in getting a buy to let or a holiday let mortgage, we can support you. Our lenders have a diverse selection of products that can help in both situations, allowing you to achieve your goals.

magnifying glass holiday lets

Where can you get holiday let mortgages from?

 
 
 
 

Getting this solution can be achieved in a couple of different ways. Either you can go directly to a lender, or you can speak with a broker such as ourselves.

Going direct to a lender is usually best for people who know what solution they need, as most providers usually only have one product available.

On the other hand, speaking with a holiday let mortgage broker can be useful in situations where you’re unsure what product you need and what you would be eligible for.  Brokers have access to a much broader range of products, so they’re able to search through a few different options to find you the best fit.

As a broker, we have access to a variety of different solutions that can support customers in this circumstance, so we may be able to find you the right solution for your plans.

How do I apply for a holiday let mortgage?

 
 
 
 

If you’ve decided that you’d like to apply for this solution, you’re in the right place. Our quick and easy three step process below will help you:

First, determine how much money you would need to borrow to cover your plans.

Call our experts on 0800 032 3535 or email us and tell us what a comfortable monthly repayment would look like for you.

Our experts will search our range of products to find you the best deal we have available for your circumstances.

Is a holiday let better than a buy to let?

 
 
 
 

Both types can be beneficial for different reasons, so it depends what you’re looking for and what you would value the most. Here are some of the factors you may want to consider when deciding what type of property to invest in:

Buy to lets:

With a buy to let property your returns may be much more stable, as the tenants will be in the property for a longer period of time. This can be useful if you rely on the money for your day to day living expenses.

There also may be less maintenance required, as you won’t have to go in and clean the property as frequently.

Finally, there are a lot of lenders who operate in this space, so there can be much wider choice when it comes to mortgage deals and products.

Holiday lets:

With a holiday let property, there is the potential to earn higher returns as you can charge more money and can increase your pricing further during peak times.

Another added bonus is that you can use the property yourself for a vacation, which may be nice if it’s located away from your home.

To add to this, there has been a lot of demand for these type of properties since the pandemic, so it could be a really lucrative business venture.

Frequently Asked Questions - Holiday let mortgages

 
 
 
 

Am I eligible for holiday let mortgages?

Lenders have different products available, and so there can be variations in eligibility criteria. Some lenders may have much stricter qualifying criteria compared to others, so it’s always important to do your research properly to find the best deals.

By using a broker you can cut your research time down, as they will search through all of their lenders for you to find the right solution for your needs.

How much deposit do I need for a holiday let mortgage?

Most lenders will require a deposit worth 20% of the property’s value. However, if you can provide a higher deposit then it is always worthwhile to do so, as it can open up better opportunities and more deals.

Always make sure you confirm what is required with your lender first, as what is accepted with one provider may not be approved with another.

How early on in the process should I speak to a lender or broker?

You can speak with a lender or broker at any stage in the process and they can give you a steer on the type of products that you might be eligible for. 

However, it is much more useful to contact when you have found your dream property, as they can give you a much better idea of rates and criteria when they have the full picture.

What holiday let mortgage rates may I get?

Interest rates can vary from lender to lender, as they have different products. Therefore, it’s always advisable to research carefully and shop around to find the best interest rates you can get.

Some of the factors that may influence the interest rate you get might include your deposit, income, and credit history.

Can you get a holiday let mortgage as a first time buyer?

Although it can be challenging, it is still possible to get a holiday let as a first time buyer. The options available will be much more limited and you will likely have to speak with a specialist lender or broker to assist you.  

Can I use the property as my own holiday home?

Yes, you absolutely can use it for yourself, relatives and friends. However, there are rules around this, the main one being that it cannot be your main residence and it must be let out for a minimum of 210 days per year. 

The lender you go with may have further conditions, so it’s important to look out for these.

Can I let my property out on Airbnb?

Yes it is entirely possible to let your property out on Airbnb! However, it’s always important to confirm this with your lender first, as there may be different rules and conditions depending on who you go with.

Is it for me?

Getting a holiday let can be a really lucrative investment opportunity, but there can be a lot of hard work involved. At the end of the day, it is ultimately a business. Therefore, only you can decide if it is the right move for you to make.   

How much does a holiday let mortgage cost?

Mortgage costs can range and are largely influenced by:

  • Property size and location- Some locations are more expensive to buy in than others and a larger property typically will be more expensive than smaller houses.
  • Your credit history and personal background – Providers may charge a higher interest rate if the risk of lending to you is greater, which can increase your repayments.
  • Type of provider you use – Brokers and lenders may charge different fees for their services, so the costs may increase or decrease depending on who you go with.

How much can I borrow with a holiday home mortgage?

Loan sizes vary depending on which provider you go with, so it is difficult to say how much you’d be able to borrow until you’ve spoken with a lender or broker.

Lending decisions may also be based on your income, credit history and any other factors relating to your personal circumstances, so it ranges on a case by case basis.

With our lenders we have options that go up to £5m, so we may have a solution that suits your plans.

Are they becoming more popular?

These properties have become increasingly popular with investors since the pandemic struck. As a result of this, there has been an increase in the number of lenders in the market and so the amount of mortgage deals available has subsequently risen.  This opens up more opportunities and choice for investors, which could further increase demand for these type of properties.

Useful guides and blogs

 
 
 
 
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