Holiday Let Mortgages
Buying a property to use as a holiday let can be a worthwhile investment as it has some attractive benefits. But when it comes to looking for a holiday let mortgage, you might be met with difficulty. Not because there is a lack of holiday let mortgages available, as there’s plenty. But because of the nature of holiday lets and because of this, you’ll find that a lot of traditional banks and building societies are less likely to offer holiday let mortgages.
Why Might You Struggle To Obtain A Holiday Let Mortgage?
If a holiday let mortgage is what you’re looking for, you might struggle to do it alone. Lenders may offer the standard buy to let mortgages, but holiday lets are a different type of risk for lenders to deal with.
This is because holiday lets are not a guaranteed source of income. You aren’t guaranteed to have people renting out your property all year round due to peak and low seasons, so your rental income is likely to fluctuate.
However, with a standard buy to let mortgage, you might only need to find one tenant to move in who will commit to staying for a year. As this provides more reassurance to the lender that you will be able to repay the mortgage.
If you are looking for a holiday let mortgage, you can expect to face extra checks that establish whether you can keep up with repayments and you might need to make it known whether or not you will have the home rented out all the time.
Consequently, you will probably need a larger deposit than you would with any standard mortgage. You should aim to raise a deposit of around 25% of the value of the home to get a holiday let mortgage. but anything around the 40% mark is likely to improve your chances of being approved for the mortgage.
If you need to raise extra cash for the deposit, you could look into getting a remortgage deal on your current property. You can release equity in your current home to put towards the deposit for a second home mortgage and use it for your holiday property.
Dan Churchouse2024-05-07We used Regal for our recently completed house purchase. The mortgage was a relatively complex arrangement given it consisted of two parts (a result of porting over the terms of an existing mortgage and adding additional debt on new terms) but Matthew Graves and Kirsti Newman were very clear in their articulation, making it easily digestible and allowing me to factor into monthly affordability. They were also speedy in their responses and clearly not biased to any one provider. I feel safe in the knowledge that I ended up with the best deal available and would highly recommend their services.
Taylor Joanne2024-04-30Excellent and professional service. Everything was handled and dealt with quickly.
Sue Vecchione2024-04-23Well worth the fee. Mortgage sorted in less than 48 hours. Fantastic service with great communication. Much recommended 😀
Harry Jackson2024-03-05Matthew, Kirsti and Katie were all really helpful. Made sure that, as first time buyers, we understood everything that was going on and were always there to help if we needed them to. 100% would recommend you use them!
Michael Clarke2024-03-04Karen and Kirsti have been invaluable in helping us through the mortgage application process for our first home. We would thoroughly recommend their services - it has saved us a lot of stress! Swift and considerate guidance and support throughout the process.
Ioana Tomut2024-03-02We have worked with Karen and are extremely happy with how she handled our account. This was the second time we have attempted to buy our first house and we have worked with another mortgage advisor before. While both were excellent in terms of service and communication, Karen's suggestions for solicitors and survey were significantly cheaper to what we were quoted last time. I greatly recommend them.
R Findlay2024-02-29Thank you very much to Richard at Regal Finance for making our first home purchase run as smoothly as possible. Richard was available to provide us advice throughout the whole process and I would highly recommend using Richard at Regal Finance Group!
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Joe Alsford2024-02-05I can not speak highly enough of the service I received from Richard Powers at Regal. Gave excellent clear advice, continually negotiating the best deal available. Went above and beyond, fantastic to have in your corner in what can be a stressful process!
Kiran2024-01-15Cannot recommend Regal Finance enough! Matthew and Kirsti were amazing and completely took the stress out of the process. They were always available to answer questions and guide us through everything. I found they had access to a wider range of products than other advisors I had used in the past. I will be recommending Regal Finance Group to everyone I know!
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Why Get A Holiday Let Mortgage
Mortgages for holiday lets can be a significant property investment, allowing you to own a home that will be used throughout the year by tourists. Holiday lets are different to a buy to let investment as holiday lets will most likely have multiple occupants throughout the year, each staying for a short period of time for their holidays.
However, if you are looking to stay in the property yourself and use it as a holiday home from time to time, then the criteria for the mortgage application is likely to be a little stricter than if you are just letting it out constantly. In this instance, you might be better off getting a standard mortgage.
Buying a holiday let property is an investment that requires a lot of commitment and perseverance but if you are willing to put in the time and effort, the rewards can be significant. Did you know that if you manage to get a mortgage for your holiday rental you could benefit from tax relief?
‘Why?’ you may be thinking, well, your holiday let can be seen as a business venture if the property is fully furnished and run like a holiday rental home. So you could be eligible for receiving tax relief on the mortgage interest payments. Also, just like any other trading business, any losses incurred can be offset against future profits.
In order to qualify for tax relief benefits, your holiday property needs to be available to let for less than two-thirds of the year and have been rented out for around one-third of the year. So even if you wanted to use the home as your own holiday destination for a few weeks in a year, you could still do that and qualify for the holiday property letting tax relief.
Things To Consider with Holiday Mortgage Lets
When it comes to holiday letting, you are far less likely to get approval for a mortgage to buy a property abroad as lenders see it as too much of a risk. This is because it can be much harder to find holiday occupants to regularly rent your property and provide you with the necessary rental income. Also, additional risk is added due to fluctuating foreign currencies. There are other risks involved too, such as the unfamiliarity with the property market and relevant laws in that country.
Even when applying for a holiday let mortgage in the UK, there are still extra checks and tighter rules. However, we can help you get your ideal holiday mortgage as we have the relevant knowledge of the market and the expertise to find you the best deal on your mortgage.
Want to find out more? All you need to do is give our friendly team a call and we’ll be more than happy to help you find the best mortgage for your needs.
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Complete an enquiry form and an advisor will call you back.
Step 2
Send us the documents we need.
Step 3
Receive a Decision in Principle from one of our lending panel.
