Holiday Let Mortgages UK: Rates, LTV and Criteria for 2026

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Holiday let mortgages are a specialist form of buy to let finance, designed to fund property that is let out on a short-term basis to paying guests rather than on an Assured Shorthold Tenancy.

The product has grown significantly over the past few years on the back of the rise in UK staycations, and there are now a wider range of lenders and rates available than ever before.

Holiday let mortgages tend to come with slightly higher rates and tighter criteria than standard buy to let, but for the right property, the rental income can more than offset that.

What is a Holiday Let Mortgage?

A holiday let mortgage is used to fund property let out as furnished holiday accommodation. This includes traditional holiday cottages, coastal apartments, Airbnb properties and short-term lets booked through platforms like Vrbo and Booking.com.

The key distinction from a buy to let mortgage is the tenancy type. Buy to let lenders price for properties let on 6 or 12 month ASTs, with stable monthly rent from a single tenant. Holiday let lenders price for variable income, seasonal voids and a higher turnover of guests.

Holiday lets are also assessed differently for income. Rather than using a single monthly rent figure, lenders look at projected income across low, mid and high season weeks.

You cannot fund a holiday let with a standard buy to let mortgage. Most buy to let lenders specifically prohibit short-term letting in their terms, and a breach can cause the lender to call in the loan.

Holiday Let Mortgage Rates 2026

Holiday let mortgage rates in 2026 are generally 1 to 2 percentage points higher than equivalent buy to let rates. This reflects the higher perceived risk from seasonal rental income and the smaller pool of lenders willing to offer this product.

As a guide, fixed rate products start around 5.78% at 80% LTV (Cambridge Building Society) for limited company holiday lets, with sharper rates available at lower LTVs.

The rate you achieve will depend on:

  • Loan to value (LTV) – Lower LTV means a lower rate. Sub-65% applications attract the best pricing.
  • Property type – Standard cottages and apartments price more keenly than non-standard construction, log cabins or properties in remote locations.
  • Borrower experience – First time holiday let landlords have access to fewer lenders. Experienced operators with a portfolio benefit from sharper rates.
  • Rental income strength – Strong, evidenced projections from a recognised letting agent open up better lenders.
  • Personal income – Most lenders want to see a minimum personal income of £25,000 to £40,000, depending on the lender.

It’s worth looking beyond the headline rate. Holiday let products often carry lender arrangement fees of 1.5% to 2%, and these have a material impact on the total cost of borrowing.

How Holiday Let Affordability is Assessed

Holiday let lenders use a different affordability calculation to buy to let lenders.

Rather than relying on a single monthly rent figure, lenders take an average of projected weekly income across the three rental seasons:

  • Low season
  • Mid season
  • High (peak) season

The lender then applies an income coverage ratio (ICR) at the payrate, or at a stressed rate, depending on the product. Most lenders in 2026 are using an ICR of 125% to 145%, with limited company applications typically at the lower end of that range.

Projected income usually needs to be supported by a letter from a recognised letting agent or, for existing holiday lets, evidence of actual income from the previous 1 to 2 years.

Most lenders also want to see that you can support the mortgage from personal income should the holiday let income drop. This is why they ask for a minimum personal income, and why the affordability calculation isn’t purely rent-driven.

Holiday Let Mortgage Criteria

Lender criteria vary across the market, but the standard parameters for holiday let mortgages in 2026 are:

  • Maximum LTV of 75%, with select lenders going to 80% on strong cases
  • Minimum loan size from £50,000
  • Maximum loan size up to £2m with most lenders, higher available
  • Terms from 5 to 25 years
  • Repayment or interest only
  • Available to individuals, limited companies and SPVs
  • Minimum personal income usually £25,000 to £40,000
  • Minimum age 21, maximum age varies from 70 to 85 at end of term

Limited company holiday lets are now widely available, and many landlords prefer this structure for tax efficiency. The rate differential between personal name and limited company applications has narrowed significantly over the past two years.

Some lenders restrict personal use of the property, typically capping owner occupation at 60 to 90 nights per year. If you intend to use the property heavily yourself, check this carefully before applying.

Property Types Lenders Consider

Most holiday let lenders will fund standard residential property used as a holiday let. Beyond that, criteria narrows.

Acceptable to most lenders:

  • Standard houses and cottages
  • Apartments and flats (subject to lease terms allowing short-term letting)
  • Bungalows
  • Properties in established holiday destinations

Often acceptable with the right lender:

  • Coastal and rural properties
  • Properties with annexes
  • Larger properties with 6+ bedrooms
  • Holiday let portfolios

Restricted or harder to place:

  • Log cabins and timber-framed properties
  • Properties on holiday parks with site licences
  • Properties in areas with new short-term let licensing restrictions
  • Non-standard construction

If your property falls into the harder-to-place category, this is exactly where broker access matters. Specialist lenders take very different views, and the right one can be the difference between an offer and a decline.

Short-Term Let Licensing and the Wider Market

The short-term let market has faced increased regulation over recent years, particularly in Scotland, Wales and parts of London. Some lenders now restrict lending in licensing areas, or require evidence that you hold the appropriate licence.

If you’re buying in a licensing area, factor this into your timing. Getting the licence in place before completion can significantly improve your lender options.

The wider point is that holiday let lenders are increasingly cautious about location risk. Properties in well-established holiday areas with strong year-round demand price better than those reliant on a short peak season.

Applying for a Holiday Let Mortgage

The application process for a holiday let mortgage is similar to buy to let, but with additional focus on projected income and lender criteria around property type.

You’ll typically need:

  • Proof of personal income (payslips and P60, or 2 years’ accounts for self-employed)
  • Bank statements (3 to 6 months)
  • Projected rental income from a letting agent, or actual income for existing holiday lets
  • Details of the property
  • Evidence of any existing portfolio
  • ID and proof of address

Where the property already trades as a holiday let, evidence of bookings and historic income strengthens the application significantly.

Quick Checklist for Holiday Let Mortgage Success

Before applying, run through the following:

  • Check the property is suitable for the lenders you’re targeting
  • Get a rental projection letter from a recognised letting agent
  • Confirm the area’s licensing position
  • Check the lease (if leasehold) permits short-term letting
  • Have your personal income documentation ready
  • Confirm your deposit position, including stamp duty and fees
  • Decide between personal name and limited company structure (take tax advice if needed)

If you’re unsure which lender best fits your circumstances, get in touch with our team for a free consultation. Holiday let lending is heavily criteria-driven, and the right lender match can make a significant difference to both rate and approval chances.