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From the beginning excellent communication and feedback, follow up from the team of Peter Bartlett, Alex Fryday & Garry Skimins was prompt and helpful, concluding ...Read More

Mortgages For Holiday Lets

Buying a holiday let might seem like a straightforward decision, but organising the mortgage finance is quite tricky. Depending on how you want to manage the property, the type of mortgage you need is different.

If you are planning to let out the property all year and not stay in it yourself, you might suppose that you would need a buy-to-let mortgage, however, this type of loan is not flexible enough to accommodate homes let out on a series of short-term lets to holiday-makers.

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Holiday Let Mortgage Flexibility

Typically, you would need a holiday let mortgage for this. This allows you to charge a higher rent for the months in the high season and school holidays for example, but flex these rents down in low season.

Potential Risks

Letting property out on this short-term basis can be really attractive, as usually you can earn a far higher annual rental income than you would by letting out the property on an assured shorthold tenancy agreement for 12 months. However, there are other risks to consider - with a long-term tenant, the risk that you don't receiver rental income one month is low. With a holiday let, there may be multiple weeks in the year that the property is empty.

However, you will still need to pay the mortgage each month, so the lender will want to see that you can afford to do this.

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How much can you borrow?

To work out how much you can borrow, the lender will also look at the actual income achieved on holiday homes in the area. It's also likely that you'll need a fairly large deposit as the number of lenders offering holiday let mortgages at a high loan-to-value (above 70 per cent) is small.

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Additionally, because of the risk that the property is empty for some of the year, you may be asked to show that you earn over a minimum amount - usually £20,000 a year - and that you can afford to repay all or part of the holiday let mortgage each month in addition to your other regular financial commitments.

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Speak to a specialist

Some lenders also want to see that you already own a home and pay your mortgage reliably.

It's a good idea to speak to a specialist about the options available, as often these mortgages are available from smaller, local building societies. Knowing which lender is likely to help you is important before you make your application as being unsuccessful can hurt your chances of being accepted by another lender

Find Out Current Best Rates

Property Value
£
Mortgage Amount
£
Reason for Mortgage
Mortgage Type
Lender Initial Rate Type For Then APR* ERC* Fee
Leeds BS BTL 2 Year Tracker £2499 Fee BLH1.29%TrackerOct-20205.99%5%31-Oct-2020 £2499
Leeds BS BTL 2 Year Tracker £2499 Fee Portfolio BLH1.29%TrackerOct-20205.99%5%31-Oct-2020 £2499
TSB Intermediary BTL 2 Year Fixed £1995 Fee Purchase Cashback TSB1.39%FixedDec-20205.09%4.7%31-Dec-2020 £1995
The Mortgage Works Intermediary BTL 2 Year Tracker £1995 Fee CCN1.44%TrackerNov-20204.74%4.3%30-Nov-2020 £1995
Leeds BS BTL 2 Year Tracker £999 Fee Portfolio BLH1.46%TrackerOct-20205.99%5%31-Oct-2020 £999
Leeds BS BTL 2 Year Tracker £999 Fee BLH1.46%TrackerOct-20205.99%5%31-Oct-2020 £999
The Mortgage Works Intermediary BTL 2 Year Fixed £1995 Fee CCN1.49%FixedNov-20204.74%4.3%30-Nov-2020 £1995
Barclays Bank BTL 2 Year Fixed £1795 Fee BWO1.5%FixedJan-20215.24%4.6%31-Jan-2021 £1795
Leeds BS Portfolio BTL 2 Year Fixed £2499 Fee BLH1.53%FixedDec-20205.99%5.1%31-Dec-2020 £2499
Leeds BS BTL 2 Year Fixed £2499 Fee BLH1.53%FixedDec-20205.99%5.1%31-Dec-2020 £2499
Mortgage product availability is subject to status and availability. Although great care is taken to ensure that product details are as accurate as possible no liability can be accepted for errors or omissions.
*APR = Annual Percentage Rate *ERC = Early Repayment Charge
*These figures are only illustrative. An assessment of your needs will be confirmed before a recommendation can be made. A Key Facts Illustration, which is personal to your circumstances, will be provided if a recommendation for a mortgage product is made.

Best Discounted Rates

LenderRateType
Monmouthshire BS 2 Year Discount £1999 Fee Purchase BMO0.99%
then 5.24
(variable)
DiscountRead More
Yorkshire Building Society Direct 2 Year Discount £1495 Fee YBS1.17%
then 4.99
(variable)
DiscountRead More
Beverley BS 2 Year Discount £1895 Fee BBV1.28%
then 4.75
(variable)
DiscountRead More

Best 5 Year Fixed Rates

LenderRateType
Yorkshire Building Society Direct 2 Year Fixed £1495 Fee YBS1.38%
then 4.99
(variable)
FixedRead More
Skipton BS Intermediary Exclusive 2 Year Fixed £1995 Fee SBS1.38%
then 4.99
(variable)
FixedRead More
HSBC Direct 2 Year Fixed £1499 Fee C/A Premier Standard HSB1.39%
then 4.19
(variable)
FixedRead More
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