How Does a Holiday Let Mortgage Work
A holiday let mortgage is a loan for a property let out on short stays rather than a single long tenancy. Because income comes in peaks and troughs, lenders assess it differently from a standard buy to let: they look at projected letting income across the year, local demand evidence, and often your personal income as a backstop.
Deposits are usually larger than for a standard buy to let, commonly 25 to 30%, and rates are often slightly higher to reflect the income variability. Some lenders also restrict the property type, for example requiring a minimum number of weeks of letting availability, or excluding properties with planning restrictions on short lets.
The practical steps are the same as any mortgage: agreement in principle, valuation, underwriting and completion. The extra work is the income evidence, which may include letting projections from a local agent, occupancy data for the area, and your own income documents. A broker who handles holiday lets regularly will know which lenders accept which evidence.
- Assessed on annual short-stay income, not a single monthly tenancy.
- Deposits are commonly 25 to 30%; rates are often slightly higher.
- Income evidence may include agent projections and local occupancy data.
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