Holiday let finance · UK 2026
Holiday let mortgages in the UK: specialist finance, not a buy-to-let
A standard buy-to-let mortgage is written for an assured shorthold tenancy. Holiday letting is usually a breach of those terms. You need a specialist holiday-let product, assessed on seasonal income, with a higher deposit and a stressed interest-cover test. Run the calculators on this page before you pay for a Decision in Principle.
If it does not, the deal is a bet that rates fall. That is not a plan. See the stress-test note.
Holiday let finance
Three buying situations, three different lending problems.
UK holiday let mortgages
Specialist products, deposit, ICR and why a buy-to-let will not do.
Expat / non-resident
Buying a UK holiday let while living abroad.
OpenOverseas property
Financing a let in France, Portugal, Spain and elsewhere.
OpenWhy a buy-to-let will not do
The product and the use have to match.
Most buy-to-let mortgages prohibit short-term letting. Using one on a holiday cottage, lodge or Airbnb is typically a breach: the lender can call in the loan. Some “consumer BTL” and residential products are even tighter.
Specialist holiday-let mortgages exist because the income is seasonal. Lenders in this market (often building societies and a handful of specialist BTL lenders) will look at an agent projection or historic bookings, average it across low, mid and high season, and apply an interest cover ratio of around 125% to 145% at a stressed rate, not at the pay rate on the offer letter.
Typical loan-to-value is 60% to 75%. The rate usually improves as the deposit rises. Interest-only is common; repayment is available and safer if the exit is uncertain. After April 2025, holiday lets are taxed like other residential lets, so personal borrowers only get a basic-rate credit on mortgage interest. That is a modelling problem, not a lending one, but it changes which ownership route you take to the broker.
What to have ready
A deposit you can evidence, plus purchase tax, legal fees and setup cash.
Income: two years of actual bookings, or five close comparables, not a brochure forecast.
The property use: holiday let, not a mixed “we might Airbnb it” story.
Planning, lease and insurance position that allows short-term letting.
How you will own it (personal or company) and why, after Section 24.
How lenders read the income
They do not take the August rate and multiply by 365.
A holiday-let underwriter wants a year that still pays in a bad shoulder season. That is why the break-even calculator matters more than a headline yield. If the property needs 70% occupancy to cover the mortgage, and local calendars show 50% booked 90 days out, the case is weak even if the area is famous.
Use the Break-Even Index to see the nightly rate a typical purchase needs in 27 UK areas, then replace the average price with the asking price in the holiday let calculator.
Personal vs company
Higher-rate taxpayers with a mortgage often model better in a company because interest is fully deductible there. Basic-rate taxpayers and cash buyers often model better personally. Company mortgages are usually a little more expensive and the extraction has its own tax. Run both in the calculator, then take advice before you exchange: changing route later triggers a new stamp duty bill.
Mortgage calculators
Run the numbers before you speak to a lender.
These are the mortgage calculators on this site. The main holiday let calculator is the one to use as a working model. The others isolate cash required, break-even occupancy and the holiday-let vs long-let choice.
Holiday let calculator
The working mortgage calculator: purchase price, deposit, rate, term, occupancy and running costs in one model. Cashflow, yield and break-even occupancy out.
Run the mortgage numbersHoliday let vs buy-to-let calculator
Same purchase, two strategies. See how short-let income, voids and finance compare with a long let before you pick a product.
Compare the two routesPurchase cost calculator
Cash required: deposit, additional-dwelling tax, fees, furnishing and contingency. This is the number a broker will ask for first.
Work out cash requiredBreak-even calculator
Nights and occupancy needed to cover operating costs and the mortgage. If this is higher than local calendars support, the loan does not work.
Find break-even occupancyDeal Checker (free)
Paste a listing and get a verdict, risk flags and a maximum offer after finance. Use this before you pay for a Decision in Principle.
Check a listingMortgage stress-test note
Worked example of what happens when the rate rises and occupancy falls. Read this before you treat the pay rate as the plan.
Read the stress testRelated notes
Worked examples and route choices already on the site.
Financing options for UK buyers
Specialist mortgage, cash, vendor routes and what to settle before a broker meeting.
ReadMortgage basics: how finance changes the deal
Why the same cottage looks different once the loan is in the model.
ReadCash purchase versus mortgage
When cheaper debt still produces a worse cash-on-cash result, and when it does not.
ReadWhat mortgage rate kills profit?
Sensitivity of cashflow to the pay rate, before you treat a DIP as a plan.
ReadInterest-only versus repayment
Lower monthly cost versus building equity and a cleaner exit.
ReadHoliday let mortgage calculator explained
What the working calculator is actually doing with rate, term and occupancy.
ReadGuide to financing holiday cottages
Cottage-specific checks: occupancy, furnishings and lender comfort with the property type.
ReadFinancial planning guide
Deposit, mortgage, cashflow, contingencies and records in one plan.
ReadHow to buy a holiday let
Finance is step 6 of 9. Do not start here if you have not tested income and rules.
Read the stepsNext
Model the listing, then talk to a holiday-let broker.
A broker who does this weekly will tell you which lenders will look at the case. The calculator tells you whether the case is worth their time. If you live abroad, or the property is abroad, read the matching page first: the product is different.
Broker introduction
Request a broker introduction
Tell us about the purchase. We will introduce you to a specialist holiday-let broker if we can help. This is an introduction, not advice. We only receive a referral fee if we have a written agreement with that broker. See the affiliate disclosure.
FAQs
Holiday let mortgages: common questions
Can I use a buy-to-let mortgage on a holiday let?
Generally no. Standard buy-to-let mortgages are written for assured shorthold tenancies and usually prohibit short-term letting. Using one on a holiday cottage or Airbnb is typically a breach of the mortgage terms. You need a specialist holiday-let product.
How much deposit do I need for a holiday let mortgage in the UK?
Usually 25% to 40% of the purchase price. Specialist lenders commonly lend at 60% to 75% loan to value. On top of the deposit, budget additional-dwelling stamp duty (or the Welsh / Scottish equivalent), legal and survey fees, and typically £15,000 to £25,000 of setup spend for a two-bed cottage. Use the purchase cost calculator for the cash-required figure.
How do holiday let lenders assess income?
They use historic bookings or an agent projection, often averaged across low, mid and high season, then apply an interest cover ratio of around 125% to 145% at a stressed interest rate. They do not take the August nightly rate and multiply by 365. Run break-even occupancy in the calculator before you treat a projection as a loan case.
Should I get a holiday let mortgage in my name or a company?
Higher-rate taxpayers with a mortgage often model better in a limited company because interest is fully deductible there after the furnished holiday let regime ended. Basic-rate taxpayers and cash buyers often model better personally. Company products are usually a little more expensive. Run both, then take advice before exchange.
What holiday let mortgage calculator should I use?
Use the free Holiday Let Investor calculator for the working model (price, deposit, rate, occupancy, costs). Use the purchase cost calculator for cash required, the break-even calculator for nights needed, and the holiday-let vs buy-to-let calculator if you are still choosing a strategy. The Deal Checker wraps those checks around one listing.
Can expats or overseas buyers get a holiday let mortgage?
Yes, in two different situations. If you live abroad and the property is in the UK, that is an expat / non-resident holiday-let mortgage. If the property is abroad, that is a local or specialist overseas product. They are not interchangeable. See the expat and overseas pages.
Can you introduce me to a holiday-let broker?
Yes. Use the introduction form on this page. We introduce you to a specialist holiday-let broker. This is an introduction, not advice. We only receive a referral fee if we have a written agreement with that broker. See the affiliate disclosure and the broker introduction page.
Educational only. Not mortgage, tax, legal or investment advice. Lender criteria, rates and tax rules change and depend on the borrower, the property and the country. Confirm any case with a qualified mortgage broker and, for cross-border ownership, a tax adviser in both jurisdictions. We only receive a referral fee if we have a written agreement with that broker — see the affiliate disclosure.