Holiday Let Mortgage Criteria


Here we hope to explain the main parts of the lending criteria which apply to both the property and the applicants. Having a basic understanding of these points will help you when assessing a potential property and applying for the holiday let mortgage.

Please note that each lender will have their own unique set of mortgage criteria and this will normally apply equally to holiday let remortgages and purchases.

To check the current situation please call us on 020 8301 7930.

75% LTV




Mortgage Applicants

You will need to be a UK resident aged over 21. You can be employed or self-employed but these need to be stable and with a personal income that you can prove via; company accounts, bank statements, payslips, P60, sa302 etc.

Any income derived from existing rental properties or other investments will not normally be included.

Minimum income requirement is £25,000pa.

Some lenders will provide holiday let mortgages to first time buyers, but most prefer you to be a homeowner. Finance for British ex-pats is available but is assessed on a case by case basis.

Limited Companies are permitted and mortgages are available to; individuals, partnerships, trusts, trading limited companies and SPV companies.

The Property

The property should be in the UK, made of standard construction and in habitable condition suitable for immediate letting. Most lenders prefer single dwellings which can be either freehold or long leasehold. Mortgages are available for Airbnb lets.

As with all mortgages the holiday let property will be inspected by the lender’s valuer. You will also need to obtain a rental projection from a local holiday letting agent and pass this to the lender.

It is common with holiday lets that some will have a restriction concerning how they may be used/occupied. Mortgages are available for these properties.

Finance options are available for properties that have non-standard construction, multiple dwellings and conversions. Please call us for details.

Don’t forget that a short-term holiday let is marketed as fully furnished. So all of these additional items need to be included in your initial purchase costs.


Minimum loan £40,000

Maximum loan £1.5m


Min 5 years

Max 40 years


Please call us if you would like to discuss holiday let mortgages, buy to holiday let or holiday home mortgages

Call 020 8301 7930

Please call 07587 093206 to speak with a broker.

Loan to Value (LTV)

The loan to value, or LTV, is the maximum loan that the lender can provide as a percentage of the purchase price or valuation.

For holiday cottage mortgages this is in the range of 60-75% but is also subject to your own circumstances.

So as a quick example:

Purchase price £400,000

Max 75% LTV mortgage is £300,000

Leaving a deposit of £100,000


Generally the minimum cash deposit needed will be 25% of the purchase price.

Where a larger deposit is available, 30% or more, some lenders are able to offer preferential terms and lower interest rates.

If you have other properties with equity then it may be possible to raise all or some of the deposit from these. Please call us for further advice.

We have a separate page that provides more information on holiday let mortgage deposits.

The Rent

As with buy to lets, the rent forms an important part of the financial assessment which we will undertake prior to making a mortgage application. This needs to cover the holiday rental mortgage interest payments plus an additional safety margin.

This stress test means that the average rent needs to cover the mortgage payments (interest only) by 125-145% depending on the lender.

For buy to let mortgages the valuer will look for comparables from similar let properties nearby. The rent charged for a holiday let property is generally much higher than a BTL and so this will provide a higher potential loan.

If a lender assesses a holiday let using the rent possible from a long term let (AST) then you are unlikely to receive the mortgage amount you need.

Also when a letting agent assesses the rental income they will break this down into high season, mid season and low season. The lender will take an average of this over 24-30 weeks only. If this causes a shortfall in the amount of mortgage you may be able to utilise some personal income to ‘top this up’.

Using the property

Unlike other forms of property investment you will be able to use your holiday let for yourself.

This is permitted but you will be restricted on how long each year you can use it. Its primary function should be as a holiday let.

If at a later date you wished to live permanently at the property you will need to inform the lenders and also check whether there are any formal restrictions that would prevent this.


Let us call you back.

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Kerry and Dawn were absolutely brilliant from start to finish for our first Time buy recently. As newbies we had a lot of questions which were responded to very quickly and clearly. Service was outstanding and I can't reccomend enough. Thank you!


I wanted to express my sincere gratitude to you and the team at Drake for the exceptional service and attention to detail in helping secure mortgages for both of my children in the last three months. I have had numerous experiences with mortgage brokers, but none as good as you.

Duncan H

West Kingsdown
The mortgage on our holiday let flat completed last week. Thank you both for your help with this, I appreciate all your efforts.


Basingstoke, Hampshire RG21
I have used Drake Mortgages a number of times over the years. Kerry and Dawn are both highly professional and efficient in the service provided. I have always been pleased with the deals they have been able to source as well as the on hand advice and help available. I would have no hesitation in recommending them.

Alexander Cohen

Excellent service from end to end in securing our Holiday Let Mortgage where other brokers had failed. Highly recommended.

Phil Entwistle