Getting a mortgage on a holiday let is different to a typical residential mortgage and also a buy to let mortgage. Speak with an experienced broker to secure the best deal for your circumstances.
Many people are now investing in second properties to let out as a holiday home, as the influence of platforms such as Airbnb has made the market much more accessible.
With the added attraction of being able to holiday in your property yourself, it’s no surprise that the market for holiday homes has really taken off, and where there is demand, often mortgage lenders will meet that demand.
There are now even specialist holiday let mortgage lenders in the market helping people secure finance as demand increases.
Your home may be repossessed if you do not keep up repayments on your mortgage
Going directly to a bank or building society means you’ll only hear about the products they have to offer, we search from a comprehensive panel which represents the whole of the market.
We’ll do all of the heavy lifting and speak directly with your lender, solicitor and surveyor so you don’t have to worry about the logistics.
The best bit is, we’ll fill in all of the forms and paperwork so you can concentrate on the exciting bits of buying your first home.
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A holiday let mortgage is a product you can take out with the specific intention of letting out the property to paying guests.
It’s a business, and unlike a holiday home mortgage is not for sole use, and can’t be used for tenants to live in long term as that typically qualifies as a buy to let.
To qualify as a holiday let in the UK, your property must be a furnished holiday home.
It should be in a location where you’d typically find a holiday let, such as a holiday cottage in the countryside or an established tourist area, and must be be available to rent for the majority of the year.
Government guidance also states that there must be sufficient furniture provided for normal occupation, and your visitors must be entitled to use the furniture.
The first step should be to speak to a holiday home mortgages specialist at Millennium Mortgages.
Getting a mortgage on a holiday let isn’t the same as getting a mortgage on a residential or conventional Buy to Let property. It can be more challenging, and there could be fewer lenders willing to lend to you.
Even though the mortgage market is well established, there are still many lenders that only deal with brokers and not directly with the public. A mortgage broker from Millennium Mortgages will be able to help by:
Holiday lets, holiday cottage mortgages or a holiday let mortgage is different than a buy-to-let or investment mortgage.
They are similar to a standard buy to let mortgage where you may have the option of capital repayment or interest only structure, however have different criteria that needs to be met.
There is also usually the option to purchase a holiday let in a personal name or within a business.
There are some holiday let criteria that you’ll need to meet before your mortgage application is accepted.
Rentals of your property must be short-term, with no single let for longer than 31 days allowed.
It is also usually a requirement that you are 21 or older, and many lenders will also have minimum earned income requirements. You must also give a projection of how much rental income you expect to make from your holiday let, in order to get the best holiday let mortgage rates.
You can be employed or self-employed, but your personal income should be stable that you can prove via limited company accounts, bank statements, payslips, P60, or a Tax Computation.
In rare cases, some lenders will provide a holiday let mortgage deals to a first time buyer, but most prefer you to be a homeowner.
The costs involved for mortgages for holiday lets tend to be similar to a buy to let mortgage, but as there are fewer lenders in the market, interest rates may be slightly higher.
Speaking with a mortgage broker who specialises in products for holiday homes will give you the best chance of securing an offer.
Most lenders will require a significant holiday let mortgage deposit; a typical deposit would be 25% (75% LTV) with a small number of lenders accepting 20% (80% LTV).
The mortgage lender will look at the level of letting income to justify the loan amount. Although the deposit amount required and mortgage interest charged may vary depending on the lender.
Our expert brokers are able to walk you through the mortgage process and compare holiday let products to ensure you get the best deal available to you.
We can offer expert advice, and find products that have the most competitive interest rate, as well as managing the application process for you.
Speak with one of our mortgage experts today to see how we can help you!
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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
For our advice services, we will charge a fee of between £199 and £999, payable at receipt of mortgage offer. (Range of fees available on request) Our typical fee is £399. We will also be paid commission from the lender. We will provide you with full written details of the basis upon which we will be paid for the Services we provide. This could include a payment from your mortgage provider and/or a fee we will charge you. We will not commence any substantive work for which we will charge you a fee until we have agreed the applicable fee with you and such fee is recorded in a binding Client Fee Agreement. We will not exceed any limits on any fee set out in the Client Fee Agreement without your Agreement. We will advise if it is appropriate to pay fees or charges in connection with the mortgage up front as opposed to adding them to the sum advanced under the mortgage contract. We will not commit you to an application for a mortgage where a fee or charge of any kind (receivable by our Firm or another party) is to be added to the sum advanced, unless you have made a positive choice to add the fee or charge to the sum advanced.
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