Holiday let mortgages explained: how much you can borrow and on what terms
A holiday let mortgage is a specialist product assessed on what the property will earn from short-term lets, not on your salary. This guide explains how much you can borrow, the deposit you need, and how the lending actually works.
A holiday let mortgage funds a property let on short-term, furnished holiday bookings, and it is assessed on the projected letting income across low, mid and high season rather than on your personal salary. Lenders want the seasonal rental income to cover the mortgage interest with a margin, typically at a stress rate, and they usually lend up to about 70 to 75 percent of value, so a deposit of 25 to 30 percent is normal. It is a specialist market served by building societies and specialist lenders, and criteria vary by lender and trading history. Whether a facility is regulated depends on personal use, and we refer regulated cases to an FCA-authorised firm. We arrange the commercial and specialist lending; we do not lend.
At a glance
- Assessed onProjected seasonal letting income
- Not onYour personal salary
- Typical loan to valueUp to about 70 to 75 percent
- Typical deposit25 to 30 percent
- LendersSpecialist building societies and lenders
- MarketAverage gross income 25,600 pounds in 2025 (Sykes)
What a holiday let mortgage is
A holiday let mortgage funds a property that is let out on short-term, furnished holiday bookings rather than on a long residential tenancy. It is a specialist product, different from both a residential mortgage and a standard buy-to-let, because the income is seasonal and comes from many short stays rather than one tenant on a twelve-month lease. You cannot run a holiday let on an ordinary residential mortgage, because that breaches its terms, so the right product matters. Sector detail is at /asset-classes/holiday-let-finance/.
The market is resilient: Sykes put the average gross annual income per let property at 25,600 pounds in 2025, with five-bedroom lets averaging 48,200 pounds and demand for properties sleeping six or more up 25 percent year on year, against a backdrop of nearly two-thirds of Britons planning a domestic staycation. Earnings vary widely by region, size and occupancy, so the projection matters. Most holiday-let lending is commercial and unregulated, but where a property is also for the borrower's own significant personal use it can be regulated, and we refer those cases to an FCA-authorised firm.
How much you can borrow
Borrowing on a holiday let is driven by the projected letting income, not your salary. A lender assesses what the property should earn across low, mid and high season, usually supported by a letting agent's projection, and wants that income to cover the mortgage interest with a margin, tested at a stress rate above the pay rate. The stronger and more evenly spread the seasonal income, the more you can borrow, up to the lender's loan-to-value cap. This income-cover test, rather than an income multiple, is what sizes the loan.
| Factor | Effect on borrowing |
|---|---|
| Seasonal income projection | Higher projected income supports a larger loan |
| Loan to value cap | Usually up to about 70 to 75 percent |
| Stress rate | A higher stress rate reduces borrowing |
| Location and size | Drive the achievable letting income |
| Experience | A track record widens lender choice |
Deposit, rates and lenders
A holiday let mortgage usually needs a deposit of 25 to 30 percent, reflecting a loan to value up to about 70 to 75 percent, though a strong income projection or an established track record can help. Rates are priced as a specialist product and are typically above a standard residential mortgage, reflecting the seasonal income and the specialist market. The lenders are mostly building societies and specialist lenders rather than the high-street banks, which is why matching the case to the right one matters. All figures vary by lender and trading history and are indicative only.
You do not always need holiday-let experience to get a holiday let mortgage. Some specialist lenders accept first-time holiday-let landlords, provided the income projection is credible and the deposit is there, though experience widens the choice and can improve the terms. A professional letting projection for the specific property does more to strengthen a first-timer's case than anything else.
Rules that affect a holiday let
A few rules shape whether and how a property can be let. In London, the ninety-day rule limits short-term letting of a whole dwelling to ninety nights a year without planning permission, which affects both the income and the finance. Planning use matters too, and some areas are tightening short-let control. The tax treatment also changed: the furnished holiday let tax regime, with its former advantages, was abolished from April 2025, so take current tax advice rather than relying on older guidance. None of these are finance figures, but they all feed the income projection a lender assesses.
- London ninety-day rule limits whole-property short lets without planning permission
- Planning use and local short-let restrictions can affect how a property is let
- The furnished holiday let tax regime was abolished from April 2025, so take current advice
- A credible seasonal income projection is central to how much you can borrow
- Regulated where there is significant personal use, then referred to an FCA-authorised firm
How we arrange holiday let finance
We match the case to the specialist lender whose criteria fit the property, the location and your experience, size the loan against a credible seasonal income projection, and structure the deposit sensibly. Where a property is also for significant personal use and the lending would be regulated, we refer it to an FCA-authorised firm. We are an arranger, not a lender. See also /guides/serviced-accommodation-finance-guide/ for short lets run as a business, and /guides/commercial-mortgage-rates-hospitality/ for how pricing is built.
Holiday let mortgages explained: how much you can borrow and on what terms: common questions
How much mortgage can I get for a holiday let?
It is driven by the projected seasonal letting income, not your salary. Lenders want that income to cover the mortgage interest with a margin at a stress rate, and usually lend up to about 70 to 75 percent of value. A stronger, more evenly spread income projection supports a larger loan. A professional letting projection for the specific property is the key to maximising it.
Is it hard to get a holiday let mortgage?
It is a specialist market rather than a hard one. The lenders are mostly building societies and specialist lenders, and they assess the property's letting income rather than your salary, so the case rests on a credible seasonal projection and a deposit of usually 25 to 30 percent. Matching the property to the right lender is the main task, which is what a broker is for.
What deposit do you need for a holiday let mortgage?
Usually 25 to 30 percent, reflecting a loan to value up to about 70 to 75 percent. A strong income projection or an established track record can help at the margin. Rates are priced as a specialist product, typically above a standard residential mortgage. Figures vary by lender and trading history and are indicative only.
Can I get a holiday let mortgage with no experience?
Often yes. Some specialist lenders accept first-time holiday-let landlords, provided the income projection is credible and the deposit is in place, though experience widens the lender choice and can improve the terms. A professional letting projection for the specific property strengthens a first-timer's case more than anything else.
What is the 90 day rule for holiday lets?
In London, the ninety-day rule limits short-term letting of a whole dwelling to ninety nights in a calendar year without planning permission. It affects both the income a property can earn and the finance, so it needs factoring into any London holiday-let projection. Outside London, other planning and local short-let rules can apply instead.
Can I run a holiday let on a residential mortgage?
No. Letting a property on short-term holiday bookings breaches the terms of an ordinary residential mortgage, which assumes owner-occupation or, for buy-to-let, a long tenancy. You need a holiday let mortgage or the appropriate specialist product. Using the wrong mortgage can put the borrower in breach, so it is worth getting the product right from the outset.
Are holiday lets still worth it after the tax changes?
The furnished holiday let tax regime and its former advantages were abolished from April 2025, so the tax position is less favourable than it was, and current advice is essential. That said, the letting market remains resilient, with Sykes reporting an average gross income of 25,600 pounds per property in 2025. Whether a holiday let works now depends on the specific property, its income and current tax advice.
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