Can I remortgage my holiday let?

A holiday let remortgage can be a smart way to secure better rates, release equity, or reshape your borrowing around how the property is actually performing.

Because holiday letting works differently from standard buy to let, it pays to understand what a remortgage can do for you, and to approach it with a lender who understands the sector.

Why remortgage?

There are several reasons a holiday let owner might look to remortgage:

• Securing a better rate. Interest rates move, and the deal you took out two or five years ago may no longer be competitive. Remortgaging can reduce your monthly payments and your total cost over the life of the loan.
• Releasing equity (Capital Raising). If your property has grown in value, or you have paid down the balance, you may be able to release some of that equity as cash, for improvements, to reduce higher-interest debt, or to fund another purchase.
• Financing improvements. If you plan to refurbish or upgrade the property, a remortgage can raise the funds, subject to the lender’s loan to value limits and evidence of the intended use. Where the works are extensive enough that the property would be unlettable while they are carried out, a bridging or refurbishment facility is usually the better route, and we can advise on that.

Don’t let your rate roll onto the default rate

Most mortgages are taken on a fixed or set-term product, typically two or five years. When that term ends, the loan usually reverts to the lender’s standard variable rate or a tracker, which is rarely competitive.

Allowing the loan to roll onto that default rate is one of the most common and costly mistakes. Before your current deal ends, it’s worth reviewing what your existing lender can offer against the wider holiday let market. More often than not, there is a better deal to be found.

Remortgage or stay with your current lender?

When your current deal is coming to an end, you have two broad options:

1. remortgage to a new lender
2. stay put and switch to a new product with your existing lender

The second route is called a product transfer.

A product transfer is usually simpler and quicker than a full remortgage, because your lender already holds your details, so there’s less paperwork and no new application to underwrite. There may be a product fee, so it’s worth weighing the costs against the savings.

The catch is that a product transfer only ever compares your existing lender’s own deals. Remortgaging opens up the whole market, and for holiday lets that often means better rates and terms elsewhere. The only way to know which route wins is to compare the two side by side, which is exactly what we do for you.

Finding the right lender

Holiday letting is a specialist area, and not every lender understands it or is willing to lend against it. Holiday let remortgage rates, criteria, and lender appetite vary widely, and many of the best specialist holiday let lenders don’t deal directly with borrowers at all, so the only way to reach them is through a broker.