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Key partner of the Legal and General Mortgage Club logo

Commercial Trust is a member of the Legal & General Mortgage Club.

We chose to work with Legal & General as they are the largest, longest-running club in the UK.

This gives our clients the confidence that their borrowing is with a lender selected by an established and trusted club, who are involved in nearly one in three mortgages processed by intermediaries like us.

Can I get a holiday let mortgage?

We can help you apply for a holiday let mortgage, whether that’s for a traditional holiday let or you need an AirBnB mortgage for short-term lettings, in personal name or via a limited company.

The rent must support the mortgage. An average of the existing, or expected, high, medium and low season rent will be used to assess if a holiday let mortgage is affordable to you.

Factors that may impact you getting a holiday let mortgage

  • Some types of poor credit
  • Not having enough money for a deposit
  • The value of the property being less than you expected

Our expert mortgage advisors are here to answer your questions, talk to them on live chat, via the phone, or get a call-back. We're are a specialist broker, here to help you get the mortgage you need.

Today's holiday let mortgage rates

You can use our holiday let mortgage calculator to compare today’s mortgage interest rates.

Eligibility for a holiday let mortgage

  • First time buyers to experienced landlords
  • You must be over 18 years old
  • Minimum deposit 20% of the property value
  • Upper age limits at application are flexible
  • Low personal incomes are accepted
  • Property, pension and employment income is OK
  • Ready to get started?

    Your personal advisor will call. Direct lines start 01603. Get today's rates, help, or apply. Lender terms provided in as little as two hours!

What is a holiday let mortgage?

Holiday lets are a great alternative to standard buy to lets. The demand for holiday lets (whether that is a traditional self-catering holiday cottage, or an AirBnB short-term letting) has been growing steadily, proving to be a lucrative option for landlords.

Holiday let mortgages are for properties being let-out on a short-term basis or as holiday accommodation.

Unlike traditional buy to lets, which are rented out on a medium to long-term basis, holiday lets are generally let out short-term basis, for a few days or weeks (though no guest can stay more than 31 continuous days).

These are typically let to holidaymakers, groups or individuals. Short-term lets serve people travelling for business, leisure or practical stays, who require temporary accommodation, which is already furnished and equipped with everything they might need.

Lenders will also often allow the owner to occupy the property themselves for up to 90 days of the year.

If you are not sure what holiday let mortgage criteria is, please take a look at our “Eligibility for a holiday let mortgage” section just below and if you have any questions, let us know and we will happily assist you.

Whilst not all holiday let lenders will offer AirBnB mortgages, there is still a wide range of lenders and products available, and we have access to both.

You will receive the highest quality service from our expert advisors, as we are a specialist holiday let mortgage broker. Do not hesitate to get in contact with us via live chat, or free call, to discuss your requirements.

We work with a range of over 80 holiday let mortgage lenders, including:

Why choose Commercial Trust?

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Apply with ease by phone

It couldn't be easier to secure a holiday let mortgage or AirBnB mortgage with our expert advisors. Ask all your questions and arrange an application on the phone from your sofa.

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World class customer service

We'll find you a great deal and take all the admin work off your shoulders, so you can relax while we get your mortgage completed. All the while giving you progress updates.

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Lender decision in 2 hours

By contacting you by phone and email you can get help more quickly than in-person services. It's possible to get you a lender decision in principle in as little as two hours after our call.

We can help you with...

  • AirBnB and holiday let mortgages
  • Properties in England, Scotland, Wales, N. Ireland
  • Switch from residential or buy to let mortgage
  • Self-occupancy allowed
  • Borrowing based on rental income from property
  • Borrow up to 80% loan to value (LTV)
  • No minimum income options
  • Lenders with no upper age limits
  • Cash back, free valuation and other incentives available
  • Flexible affordability calculations
  • Unlimited portfolio sizes
  • Remortgage to like for like loan, or to raise capital
  • Special Purpose Vehicle (SPV) holiday let accepted
  • Trading limited company holiday let accepted
  • First time holiday let landlords accepted
  • Repayment or interest-only mortgage payment options
White English cottage house with traditional wooden front door and garden

"Our client had no holiday let experience, but still got the mortgage they needed"

Holiday lets have risen in popularity and don't require holiday let or landlord experience. You can invest in personal name or through a limited company. Lee Cologne, holiday let specialist.

Read more

Costs involved with a holiday let mortgage

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  • Lenders may charge you for the valuation conducted on your property. They often also charge a product fee, sometimes this can be added to the mortgage.

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  • You will need a conveyancing solicitor who will charge fees. Read our guide to choosing a conveyancing solicitor.

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  • We charge a broker fee for our work. You pay in two parts. A booking fee, once we have found you a mortgage deal, at application. The majority of our fee is paid at completion of the mortgage.

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  • Every mortgage comes with monthly mortgage costs based on the mortgage interest rate the lender charges. These are paid on either an interest-only or capital repayment basis.

How to apply for a holiday let mortgage

1

Tell our advisors about the property you are investing in, your needs and circumstances. If you have credit concerns, chat to us about them, so we can put you with the right lender.

2

Your advisor will find the best possible deal from a search of thousands of products. They will get a lender decision in principle, this requires soft credit search (occasionally it is a hard credit search).

3

Your advisor will call to discuss the product they found for you. You will be presented with one mortgage that is the best match for all your needs and offers you the most cost effective option.

4

On your application, your advisor will submit your mortgage application. Your account manager then does all liaison and administrative work to complete the deal, whilst keeping you updated at every step.

What our clients say about us

Frequently asked questions

Holiday let deposits currently need to be at least 20% of the property value. This means the maximum loan to value (LTV) for a holiday let is 80%. Mortgage interest rates are typically lower if you put down a larger deposit, of between 25-40% of the property value.

At present, holiday let mortgage rates are typically higher than standard buy to let rates, which would make like for like borrowing more expensive. However, don’t assume that this puts a holiday let mortgage out of financial reach.

Rental income from holiday lets is typically significantly higher than from a standard buy to let, meaning yields are very favourable.

There are considerations to take into account when running a holiday let. They require more regular management, such as cleaning, laundering, and checking visitors in and out. The owner will also be responsible for covering all of the bills, regardless of whether the property is occupied or not.

But, the owner does have the benefit of being able to stay in the property themselves for some of the year.

The loan size you can get with a holiday let mortgage will depend on the rental income it receives or is expected to generate. Holiday let rental income is different to a standard buy to let mortgage, this is because holiday lets typically attract different rental amounts according to the season.

Summer will generally attract peak prices as will school holidays, due to the level of demand. Winter, by contrast, tends to attract lower rents, with the exception of Christmas and New Year breaks.

As a result, mortgage lenders will look at an average of high, medium, and low season weekly income throughout the year and offer a loan amount related to this and their maximum loan to value rules.

The maximum loan to value for a holiday let mortgage is currently 80%. So, you can borrow up to 80% of the property value and will need at least a 20% deposit.

Unfortunately, we cannot offer holiday let mortgages for holiday lodges.

Holiday lodges, timber lodges, caravans or mobile homes are, in essence, temporary structures that can be removed from their location.

Given the property could be transported away, any loan using the property as security, is at significant risk. This is why the lenders we work with will not accept temporary structures as the security for a holiday let - or other - mortgage.

A residential mortgage is designed for properties where the owner occupies the property. If you decide to move out of your home on a temporary basis and to rent it out, you could ask your lender for a consent to let.

It is important to be clear with your lender on the basis under which you will be letting the property. Your lender may assess their decision differently if you are pursuing short-term holiday let, rather than long-term lettings where a tenant will live in the property permanently.

If you intend to let out your entire house as an AirBnB rather than live in it, then remortgaging on to a holiday let product may be a better option.

Those with residential mortgages on their home often choose capital repayments, where the lump sum borrowed is paid off as well as interest for borrowing the money. This is so they end up owning the property at the end of the term.

If you remortgage to a holiday let product, you might choose interest only payments, if you no longer want to live in the property, so owning the property at the end of the term may be less of a priority.

On a like for like loan, interest only payments would be less, so the margin between the costs of the mortgage, versus the rental income, could be more favourable.

This may influence a decision to remain on a residential mortgage with a consent to let, or switch to a holiday let mortgage. It may also influence whether you decide to take out a holiday let mortgage on a capital repayment or interest only basis.

Holiday let mortgages are not regulated by the FCA (Financial Conduct Authority). A holiday let mortgage is a type of buy to let mortgage. Buy to let mortgages are generally not FCA regulated, because they are seen to be products taken out by businesses, not by consumers.

You may be able to get a holiday let mortgage as a first time buyer. If you are the only applicant on the mortgage and are a first time buyer, there are fewer options. However, you could also consider making a joint application with someone you trust, who has owned property before. This can widen your options. Get the help of a specialist broker like Commercial Trust.

No, a holiday let property does not require a commercial mortgage.

Holiday let properties can be financed with a buy to let mortgage, designed for short-term lettings. A commercial mortgage is for a property that a business or multiple businesses operate from.

Similarly, you can take out a holiday let mortgage through a limited company, This still does not require a commercial mortgage. The need for a commercial mortgage is not dictated by the type of applicant you are, it is dictated by the intended use of the building.

You can change a buy to let property into a holiday let, but if your property is mortgaged, you will need to switch from a standard buy to let mortgage to a holiday let mortgage.

It is not uncommon for landlords to change their investment strategy and choose to rent a former long-term let on a short-term holiday let basis.

However, the dynamic changes and so a different type of mortgage is required. It is straightforward to make the change - just like any remortgage process.

Be aware that if you are within the deal period of your existing mortgage, you may be subject to early repayment charges, so it may be better to wait until your current mortgage is ERC free. Ask our advisors about this and they will happily guide you through.

You only pay council tax on a holiday let property if it does not qualify for holiday let business rates.

To qualify for business rates a property in England needs to be available to let for a total of 140 nights per year and actually let for at least 70 nights in the previous 12 months.

A property in Wales needs to be available to let for a total of 252 nights per year and actually let for at least 182 nights in the previous 12 months.

No, it is not particularly hard to get a holiday let mortgage. A specialist mortgage broker such as Commercial Trust can help you find a suitable product from a wide choice.

Whilst holiday let mortgages are a more specialist type of borrowing, which means there are fewer lenders than for residential mortgages, there is still plenty of lenders offering them.

First time landlords can secure a holiday let mortgage, but if you own your own home this presents more lender options.

First time buyers have fewer lender options, but it still may be possible to get a holiday let mortgage.

Using a broker to help you find a deal suited to you can be helpful, because a specialist in these products will know how to go about appropriate due diligence to find you a competitive deal that suits your needs and circumstances.

There is a greater level of administration associated with holiday lets because, rather than tenants moving out infrequently, you have a turnover of tenants regularly. This can be outsourced, but you would need to factor the costs of that into your profit and loss.

Upfront costs are likely to be higher, as holiday lets must be fully furnished prior to renting. Expectation from holiday tenants is higher, in terms of facilities and amenities, because rather than spending day to day life in the property, a holiday is a special time that people look forward to so the property must meet that anticipation.

To stand out against other holiday lets, you are likely to have to invest in special extra touches and quality of décor and furnishings that would not be required of a standard, unfurnished let.

However, holiday lets are typically significantly more profitable than standard buy to let properties, because the yields are usually higher as a result of charging rent by the day or week, rather than by 6 or 12 months. This can make holiday lets a very lucrative investment.

A residential mortgage is not suitable if you are permanently letting out your property on a short-term/holiday let basis, so a holiday let mortgage is the ideal way to secure borrowing.

You will need a specialist holiday let mortgage, if you are buying an AirBnB property. There are a number of providers who will offer AirBnB mortgage lending, but each lender has different criteria, so the easiest way to find out which lender is suited to your needs is to speak to a specialist broker like Commercial Trust.