Specialist Commercial Mortgage Broker

Holiday Let Mortgage Commercial Finance for Holiday Homes and Serviced Accommodation

We help holiday home owners, Airbnb hosts and serviced accommodation operators finance short-let property across the UK. Holiday let lenders assess a property on its projected letting income rather than a residential wage, so the numbers work differently from a standard house purchase. Our brokers arrange finance to buy, refinance or expand a holiday let, from single cottages to portfolios held in a limited company.

From 6.50%

Interest rate

Up to 70%

Loan-to-value

5-25 years

Mortgage term

£100,000

Minimum loan

Holiday Let Finance: How a Holiday Let Mortgage Works

A holiday let mortgage is a type of commercial mortgage that funds a furnished property let to holidaymakers on short stays rather than to a single long-term tenant. It sits apart from a residential loan because the income is seasonal and variable, and apart from a standard buy-to-let because guests turn over weekly, not annually. Lenders treat a holiday let as an income-producing asset and underwrite it accordingly.

Why short-let income is underwritten differently

The practical difference is how affordability is measured. On a residential mortgage a lender looks at your salary. On a holiday let the lender looks at what the property can earn across a season, then checks that the projected rental income covers the mortgage payment with a safety margin. This is why a holiday let can stack up even when a comparable residential purchase would not, and why the choice of lender matters so much.

Most holiday let lending is unregulated. Commercial mortgages fall outside the FCA's regulated mortgage perimeter where the property is a genuine investment let to unconnected guests. Where the owner or a family member occupies the property for part of the year, the deal can tip into regulated territory, and we refer those cases to a regulated firm. We explain that distinction in full below, because it changes which lenders and products are available to you.

Property types and owners we fund

We arrange holiday let finance for houses, cottages, coastal apartments, converted barns and purpose-built lodges, whether you hold one property or a portfolio. Alongside a commercial mortgage for acquisition, we also help owners refinance to a better rate or release equity to buy the next property. A sibling option some owners consider is a guest house mortgage where the property is staffed and run as a business.

The people we help range widely. Some are first-time owners buying a coastal cottage to let and use occasionally, others are established landlords adding short-let stock to a rental portfolio, and a growing number are running serviced accommodation as a full business across several units. Each has different lending needs, and the strength of the case usually rests on the projected income and the ownership structure rather than the size of the borrower. We shape the application around whichever of these you are, and around the season length the property can realistically achieve.

Holiday Let Mortgage Rates and Lending Criteria

Holiday let mortgage rates typically run from around 6.5% to 8.5% depending on the lender, the loan-to-value, and the strength of the projected income. Most lenders cap borrowing at 70% loan-to-value, so a deposit of around 30% is the working assumption for a purchase. Interest-only and capital repayment structures are both available, and interest-only is common where owners want to keep monthly costs low across quieter months.

ScenarioTypical rate (pa)Max LTVTerm
Purchase (single holiday let)6.50% to 8.00%70%5 to 25 years
Refinance or equity release6.50% to 8.25%70%5 to 25 years
First-time holiday let owner6.75% to 8.50%65%5 to 25 years
Portfolio or limited company6.75% to 8.50%70%5 to 25 years
Serviced accommodation or Airbnb6.75% to 8.50%70%5 to 25 years

Beyond the headline rate, lenders apply their own criteria on borrower profile and property type. Common conditions include:

  • A minimum personal income outside the letting business, often in the region of £20,000 to £25,000, to show the mortgage is not solely reliant on bookings.
  • A projected letting income that covers the mortgage payment by a comfortable margin, usually stress-tested at a rate above the pay rate.
  • Restrictions on personal use, since heavy owner occupancy reduces lettable weeks and can push the loan toward regulated lending.
  • Property suitability, including sole-use holiday accommodation, no onerous occupancy tie, and a saleable open-market value.
Interest-only is widely available on holiday lets and keeps monthly cost down across the quiet season. A £300,000 loan at 7% costs around £1,750 a month interest-only against roughly £2,120 on capital repayment over 25 years. We model both so your off-season cashflow is realistic before you commit.

Rates move with the wider market, so it pays to compare current commercial mortgage rates before committing. Fixed rate products, often over two or five years, give certainty across seasons, while variable rate deals can suit owners planning to refinance or sell within a short window. Our brokers model both against your projected income so the monthly figure is realistic, not optimistic.

The true cost beyond the headline rate

Product fees, early repayment charges and the length of any fixed period all affect the true cost of a holiday let mortgage, and the lowest headline rate is not always the cheapest deal once fees are counted. A short fix with a low rate but a high arrangement fee can work out dearer than a slightly higher rate with no fee if you plan to hold the property for years. We compare the total cost over the period you expect to keep the property, not just the pay rate, so the figure you commit to reflects what you will actually pay.

Fixing for certainty across seasons

Most borrowers choose a fixed rate for certainty of repayments. Two and five year fixed rate holiday let mortgages dominate the market, with fixed rate pricing typically 0.25% to 0.75% above the equivalent standard buy-to-let product. First time holiday let buyers usually see slightly lower maximum LTV and a smaller panel of lenders, so presenting a strong application matters more on a first purchase. We compare fixed and variable holiday let mortgages across the whole panel before recommending a product.

Which Lenders Offer Holiday Let Mortgages?

The holiday let market is served mainly by building societies and specialist lenders rather than the big high-street banks. Building societies are especially active: Leeds Building Society, the Cumberland and Principality all run dedicated holiday let ranges and understand seasonal income. Specialist commercial lenders such as Shawbrook and InterBay Commercial lend on portfolios and limited company structures, while LendInvest and Cynergy Bank compete on investment property more broadly.

Mainstream banks do lend selectively. NatWest, Barclays and Santander have appetite for holiday lets with strong personal covenants, and Lloyds supports established landlords, though their criteria tend to be tighter on personal use and season length. Because appetite varies so widely, the same application can be declined by one lender and approved by another purely on how each treats holiday income.

Where a broker moves the needle

That is where a broker earns their keep. We hold relationships across the building societies and specialist lenders that dominate this niche, and we know which ones accept Airbnb income, which insist on a holiday letting agency projection, and which will consider a first-time holiday let owner. Rather than approach lenders one at a time, we place your case with those most likely to say yes at the loan-to-value you need. You can see the shape of our panel on our lenders page, and we keep it current as products change.

How location and construction shift appetite

Appetite also shifts with location and property type. Some lenders will not touch a former holiday let with a restrictive planning tie, others limit lending in tourist hotspots where holiday lets are concentrated, and a few will not consider timber-framed lodges or non-standard construction at all. Scotland and Wales bring their own considerations, and not every lender covers the whole of the UK. Knowing these quirks before an application goes in saves a wasted credit search and protects your record, which is a large part of why placing the case correctly first time matters.

How Lenders Assess Projected Holiday Letting Income

The heart of a holiday let application is the income projection. Because a holiday property earns different amounts across the year, lenders do not take a single weekly figure. Instead they ask for an assessment from a recognised holiday letting agency showing the achievable weekly rate in low, mid and high season, then blend those into an annualised figure discounted for void weeks and running costs.

Two holiday lets with the same open-market value can support very different loans. Lenders do not price the bricks, they price the booking calendar, and a cottage that lets forty weeks a year borrows far more than one that fills only in summer.

A typical calculation averages the low, mid and high season weekly rates, applies an occupancy assumption for each band, and tests whether the resulting rental income covers the mortgage at a stressed rate. This matters because two properties with the same open-market value can support very different loans depending on their booking calendar. A coastal cottage that lets forty weeks a year borrows more comfortably than an inland property that fills only in summer.

  • Holiday letting agency projection: achievable weekly rates in low, mid and high season from a recognised agency.
  • Personal income evidence: often £20,000 to £25,000 outside the letting business to show the mortgage is not reliant on bookings alone.
  • Booking and occupancy history: existing calendars, past occupancy and reviews that support the projected income.
  • Deposit and source of funds: around 30% of the purchase price, with evidence of where the money comes from.
  • Ownership structure: personal names or a special purpose vehicle, with directors giving personal guarantees.
  • Property suitability: sole-use holiday accommodation, no onerous occupancy tie and a saleable open-market value.

Evidence that lifts a projection

Owners can strengthen a projection with evidence. Existing booking records, past occupancy data, reviews and a clear marketing plan all help a lender lend at the top of its range. For a purchase, an agency letter projecting realistic season-by-season income is usually enough. Our brokers prepare this evidence with you so the commercial mortgage calculator figures you model at the outset match what the lender will actually accept.

Tax after the furnished holiday let regime

Tax treatment also feeds into affordability. The furnished holiday let (FHL) tax regime, which historically gave holiday lets favourable treatment on interest relief and capital allowances, was abolished from April 2025, and holiday lets are now taxed broadly in line with other property businesses. We are brokers, not tax advisers, so we work alongside your accountant on how the change affects your net position and the ownership structure you choose.

Limited Company, Personal Ownership and Portfolio Holiday Lets

How you hold a holiday let shapes the finance. Many owners buy personally for a single property, while investors building a portfolio increasingly use a limited company, often a special purpose vehicle set up to hold property. A company structure can suit higher-rate taxpayers and portfolio owners, and several holiday let lenders, including Shawbrook and InterBay Commercial, are comfortable lending to a corporate borrower with personal guarantees.

Growing a short-let portfolio

Portfolio holiday lets bring their own considerations. Where you own several properties, lenders assess aggregate borrowing, background portfolio performance and total exposure, not just the property in front of them. Cross-security and portfolio facilities can improve terms for experienced owners, and refinancing an existing property to release a deposit for the next is a common way to grow. We structure these so the whole portfolio stays fundable as it expands.

Personal names or a corporate vehicle

The decision between personal and company ownership is part tax, part finance and part succession. Company borrowing can carry slightly higher rates but broader interest deductibility, while personal ownership is simpler and can access certain building society products. We map the finance implications of each route and coordinate with your accountant on the tax side. Owners weighing a mixed holiday and residential model sometimes also look at a commercial buy-to-let mortgage for the longer-let part of a portfolio.

Lenders also care about how a limited company is set up. They prefer a clean special purpose vehicle whose only activity is holding property, because a trading company with mixed activities complicates the security and the credit assessment. Directors and shareholders usually give personal guarantees, so the individuals behind the company are still assessed on their own income and credit. We help owners structure the company correctly at the outset, working with your accountant, so the finance is not held up by a company whose accounts or activities do not fit what lenders expect.

Airbnb, Serviced Accommodation and When a Holiday Let Becomes Regulated

Serviced accommodation and Airbnb-style short lets are now a mainstream part of the market, and lenders have adapted. An Airbnb mortgage is not a separate product; it is a holiday let mortgage on a property let through platforms like Airbnb or Booking.com. The key point for lenders is that the property is let to a stream of unconnected guests on short stays, which keeps it firmly in commercial, unregulated territory.

When owner use tips a let into regulated lending

The line to watch is occupancy by the owner or their family. Where you or a family member live in the property, or occupy it for a significant part of the year, the loan can become a regulated mortgage contract rather than unregulated commercial lending. Commercial mortgages are unregulated lending, but a genuine second home or a property with meaningful family use falls under the FCA's regulated mortgage perimeter. We refer those regulated cases to a regulated firm rather than arrange them ourselves.

For pure investment short lets, we help hosts and operators across the range: single Airbnb units, multi-property serviced accommodation businesses, and lodges on holiday parks. Where the model shades into a fully operated hospitality business, a holiday park mortgage or guest house route may fit better, and we advise on which sits best against your plans. Whichever structure you choose, we match the property, the income profile and the ownership vehicle to the lenders most likely to fund it.

How location shapes achievable income

Location shapes the numbers as much as the property does. Established tourist areas such as the Lake District, Cornwall, the Cotswolds, the Scottish Highlands and the coast support strong weekly rates and long seasons, which underpins the projected income a lender will accept. Some local authorities have introduced short-let licensing or controls on new holiday lets, and a few restrict how many nights a property can be let, so the local picture affects both value and lettability. We factor the location and any local rules into the finance strategy from the start, so an application reflects what the property can genuinely achieve in its market.

“I always tell holiday let buyers that the booking calendar matters more than the postcode. I have seen two near-identical cottages get very different offers because one let forty weeks a year and the other filled only in summer. Bring me a recognised agency projection with real low, mid and high season rates, and we can usually secure up to 70% loan-to-value with rates from around 6.5%.”
ML

Matt Lenzie

Founder & Principal Broker, Commercial Mortgages Broker

Frequently Asked Questions

Is it hard to get a holiday let mortgage?

Not with the right lender. Fewer lenders offer holiday let mortgages than standard buy-to-let, but building societies and specialist lenders are active in this niche. We match your property and projected income to lenders with genuine appetite, which is usually the difference between a decline and an offer at up to 70% loan-to-value.

How does a holiday let mortgage work?

A lender assesses the property on its projected letting income across low, mid and high season rather than on your salary. They blend those seasonal rates, discount for void weeks, and check the figure covers the mortgage at a stressed rate. We typically arrange up to 70% loan-to-value with rates from around 6.5%.

What is the 10 year rule for holiday lets?

The ten year rule relates to planning: a use that has continued unchallenged for ten years can become lawful even without express planning consent. It is a planning matter, not a lending one, but a lender may query a property's planning status. We flag any use or occupancy conditions early so they do not derail the application.

What is the loophole for holiday let tax?

The furnished holiday let regime, which gave holiday lets favourable tax treatment on interest and capital allowances, was abolished from April 2025. Holiday lets are now taxed broadly like other property businesses. We are brokers rather than tax advisers, so we work with your accountant on how the change affects your position and ownership structure.

Can I get a holiday let mortgage through a limited company?

Yes. Several specialist lenders and building societies lend to limited companies, often a special purpose vehicle holding the property, usually with personal guarantees. A company structure can suit portfolio owners and higher-rate taxpayers. We arrange both personal and corporate borrowing and coordinate with your accountant on which route fits.

What deposit do I need for a holiday let?

Most holiday let lenders cap borrowing at 70% loan-to-value, so plan for a deposit of around 30% of the purchase price. Stronger projected income and an experienced track record can help you borrow at the top of a lender's range. Existing owners can often release equity from one property to fund the deposit on the next.

Do I need to use a holiday letting agency for the income projection?

Usually, yes. Most lenders want a projection from a recognised holiday letting agency showing achievable weekly rates in low, mid and high season. Existing booking records and occupancy data strengthen the case. We help you assemble this evidence so the income the lender accepts matches the figures you rely on.

Do I pay stamp duty on a holiday let?

Yes. A holiday let purchase in England and Northern Ireland attracts Stamp Duty Land Tax at the additional dwelling rates, currently a 5% surcharge above standard residential bands, because the property is not your main home. Scotland and Wales apply their own equivalents (LBTT and LTT) with similar surcharges. We recommend confirming the exact figure with your solicitor or accountant before committing, and factoring it into your total funding requirement.

How is a holiday let taxed when I sell it?

Capital gains tax applies on disposal, and since the furnished holiday lettings regime was abolished in April 2025, holiday lets are taxed like other residential property investments: business asset disposal relief and other FHL advantages no longer apply. Ownership structure (personal versus limited company) changes the position materially, so take advice from a tax professional before you buy rather than when you sell.

Related Pages

Guest House MortgageHoliday Park MortgageCommercial Buy-to-Let MortgageCommercial Mortgage RatesCommercial Mortgage Calculator

Key Concepts

MortgageLoanRefinancingLoan-to-value ratioVacation rentalAirbnbInterestSpecial-purpose entity

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