Mortgage For Holiday Lets: The Solutions You Need

Get a holiday let mortgage to buy, convert and operate a holiday home business

Speak to one of our experts020 4525 5312

4.4 out of 5 stars on Google!
Our customers trust Rangewell.

Google reviews

Funding options



  • Up to 80% Loan to Value available
  • £50,000 – No Maximum
  • Rates from 2% over base rate
  • Market value or business value


  • Repayment and interest only available
  • Adverse Credit – no problem
  • Income to be 125% of the mortgage interest,
  • Straightforward


  • Finance for refurbishment
  • Refinance existing property assets
  • Land purchase
  • Oveseas solutions

Talk to Rangewell – the holiday home finance experts

Holiday homes can provide a rewarding business, but most lenders cannot provide the funding you need. We know those that can, and we will work with you to find the most competitive deal on the funding that's right for you

At Rangewell we recognise your professional status, and we work harder to find you better solutions - which can include 100% finance for many of your needs.

Call us020 4525 5312
ScheduleArrange a call-back

Holiday Home Finance & Holiday Property Mortgages

Mortgages for holiday lets are a form of lending designed for properties outside of your permanent residence which you let on a short-term basis

If you're looking to get a holiday let mortgage, you may struggle due to heightened expectations from lenders. To raise holiday home finance, you'll need to offer a larger deposit compared to residential mortgages and navigate trickier eligibility criteria.

To ensure you start your holiday let ownership journey correctly, you need to know what holiday let mortgage providers expect and which options are right for you. 

Table of Contents

Letting holiday homes to guests, whether in the UK or abroad, can be a lucrative business. A good-quality property in a sought-after holiday location could bring in three times the annual income of a standard buy to let property.

A 4/5-bedroom holiday cottage in a popular area, with a good level of equipment and its own pool, could generate upwards of £3000 a week in high season. A standard property with a similar number of bedrooms for the year-round rental market in the same areas could bring in £800 a week according to listings on Rightmove.

Whether you're looking to buy your first holiday let property or you've already got a portfolio and need further finance for expansion or upgrades, you'll likely need the support of a lender. Compared to standard residential property, holiday let mortgages typically demand greater deposits and different eligibility criteria, making it vital that you know your options before you apply. 

Rangewell operates as a holiday let mortgage broker and finance expert that can help you secure whatever type of funding you need to reach your holiday property business goals. Let's take a closer look at the holiday let mortgage process to help you make an informed decision. 

How does a holiday let mortgage work?

Holiday let mortgages are unique to holiday let owners and are designed around the specifics of the industry, such as guest and area risks, booking projections etc. 

A holiday let mortgage is ideal for those who are looking to borrow money for a property that will be let out on a short-term basis to visitors and is classed as a business. 

This differs from a standard holiday home mortgage. Holiday home finance typically applies when you borrow money to buy a second home that only you will use. 

It is also different from a buy-to-let mortgage, where you would buy a property that will be let out long term. 

The main advantage of a holiday let is that you can rent it out for far more money and you could generate a much higher income. 

Furnished holiday lets have different tax rules as they are classed as businesses which means you can claim tax relief on mortgage interest. 

For a property to count as a holiday let, it must be available for letting for at least 210 days per year, leaving you 22 weeks to enjoy your holiday home. 

We've recently produced a full, in-depth guide to holiday let mortgages, so click the link to get a more complete answer. 

Staycations are on the rise and UK holidaymakers are increasingly likely to holiday at home. This, combined with changes to traditional buy-to-let property tax regulations, means that holiday property is becoming a popular alterntative for investors. Securing a mortgage for holiday lets provides a clear pathway towards generating a solid return on property investment. 

Looking to fund a holiday let?

Speak to our team today to get the most appropriate and affordable funding for your plans

Call us

How much can I borrow?

Some of our lenders can lend up to 75% LTV on a two or five-year fixed-rate mortgages with loans from £50,000 to £1.5million. Of course, the actual amount will depend on the ability to afford the loan based on their expected holiday let rental income.

Lender offers will depend on how well your application meets their expectations. You can use Rangewell as your holiday let mortgage broker to help strengthen your application and improve your overall offer. To find out how much you can borrow, speak to Rangewell today. 

Deposits for holiday let mortgages

To get a holiday let mortgage, you’ll typically require a minimum 25% - 30% deposit. This is far higher than a residential mortgage, representing the risk to lenders. Lenders will look to see if your property will generate an income of 125% - 145% of the interest payable on the mortgage. You’ll also need to show you can afford mortgage payments during periods when your property isn’t being rented out. 

As with most forms of property investment finance, preparing a strong business plan that demonstrates the value of the holiday let and the potential returns can help improve the offer you receive. 

As an expert in property finance across all sectors, Rangewell can help you improve your business plan and then negotiate the best possible terms and rates for holiday let mortgages, even if you have a relatively low deposit. We can also discuss alternate lending options that may help you bridge a capital gap and still secure finance for your holiday let. 

How much will a holiday let mortgage cost?

The cost of a holiday let mortgage may be higher than a standard buy-to-let or residential mortgage, as lenders can view them as riskier. You should never, however, consider trying to use a property bought under a different type of mortgage for holiday letting. Doing so is against the terms of your mortgage agreement. This counts as mortgage fraud and lenders could call in the loan, which can lead to other ramifications such as your insurance being cancelled and your reputation damaged. 

If you need a mortgage to fund your holiday home investment, you’ll need a commercial or specific ‘holiday let’ mortgage rather than a standard buy to let loan. Lenders will want the projected letting income to be well above the annual mortgage interest. Like BTL mortgages, this generally requires a rental income, after the agent’s commission, to be at least 125% of the mortgage interest, calculated at an interest rate of 6%.

Some lenders will look at the property’s market value when making a lending decision. Others will take income into consideration. If a property has an established history of holiday rentals, they may base the size of the mortgage on the expected rental yield.

Lenders will expect holiday let landlords to own another property and have a personal income above a certain minimum level. Getting a mortgage to buy a holiday home property may be easier if you already own and operate a holiday home, and can show evidence of running a successful business.

It may also be possible to secure lending to buy a holiday home with a commercial mortgage. If you need to fund a holiday home purchase at short notice, perhaps in an auction, a bridging loan might be suitable to provide large-scale funding at short notice, until you can arrange longer-term finance.

Contact us to discuss Commercial Mortgages, Bridging Loans or even Property Development Finance.

Get a holiday let mortgage now

Apply for finance with Rangewell

Other types of holiday let finance 

Depending on your circumstances and requirements, a holiday let mortgage may not be the only thing you need. Repairs, upgrades, conversions and other projects all need funding but won't be eligible for a holiday lettings mortgage. 

Rangewell can help you find the right finance to accomplish your goals, whatever they may be. Alternative finance for holiday lets includes considerations such as:

What about a holiday let mortgage abroad?

Buying a holiday home overseas can be more of a challenge. Traditional mortgages, including BTL and even holiday-let mortgages, are not suitable for property outside the UK. However, there are solutions that can provide the funds you need to buy a property abroad.

These can include loans and commercial mortgages secured on property that you own within the UK. So if you own property, including holiday homes in Britain, you may be able to raise funds on them which you then use to buy your property abroad.

Holiday let refurbishment finance

To realise the top rates for your holiday home, you will need to provide top-class facilities. Holiday homes need to be furnished to a high standard with all mod-cons. Wi-Fi has become a must, as is a state of the art television, and many guests will expect to find a kitchen at least as well equipped as the one they have at home.

Many owners report that installing a pool is also necessary. In the UK, a heated pool that can be used all year round is seen by many guests as essential, and having an enclosed pool can make the difference between long voids and a holiday home that is booked all year round.

Providing finance for refurbishing and equipping holiday homes can be achieved with a number of lending products. Smaller needs, such as an end of season refreshment of decoration, and replacement of furniture that has seen hard use, may be provided with an unsecured loan. The funds for more extensive work, such as installing a pool and associated equipment, and completing it with a weatherproof enclosure might need a business loan secured on your property itself.

Contact us to discuss the most appropriate type of finance for your refurbishment needs.

Maximise your profitability from a holiday let with the right type of funding

Our team will go through all your options quickly and hassle-free

Call us

Asset finance for holiday homes

While it is often associated with high-value assets such as industrial machinery, asset finance may be a useful option in some cases for holiday let operators. Asset finance is when a lender issues funds which are guaranteed against the value of the asset, so they have added security if you default. For holiday lets, this may be ideal for expensive equipment that can increase your bookings such as hot tubs or entertainment systems. 

Like many forms of finance, asset finance loans are offered on a case-by-case basis. If you need to outfit your holiday home with new equipment, get in touch with Rangewell today to see how asset finance can help you. 

Finance for operating your holiday home business

A holiday home may well offer substantial returns but, as with any business, there will be some significant costs to consider. The property must be thoroughly cleaned and the linen changed between guests.

You may be able to do this yourself but, if you don’t live near the property, you might need to hire a local cleaner to do it for you. The same goes for checking guests in and out, handing over and retrieving keys and dealing with breakages. Hiring a local agent to do this for you will eat into your profits.

Paying for local people to be on hand to deal with turnarounds and problems that inevitably arise will be essential if your holiday home is located abroad.

You will also need public liability insurance to cover any injuries to guests or your staff, and the usual buildings and contents cover essential with any property.

Another inevitable cost of running your holiday home business will be the cost of marketing. While there are many services that can take care of publicising and booking your properties, they may cost a substantial percentage of rental income or an upfront charge. It’s not uncommon for a letting agent to charge 20 to 30% (plus VAT) of each holiday rental if they offer a full management service.

You may need to arrange finance for many of these expenses at the beginning of the season before the full income from your business starts rolling in.

As a business, you may be able to arrange working capital loans at the beginning of a season. These are designed to provide the funds you need for the short expenses of operating a business and are designed to be paid back once funds start coming in.

Contact us about Working Capital Finance.

Dealing with emergencies

Any emergency in a holiday home can be costly to your business. A problem with facilities such as heating or plumbing, which might be relatively minor in a conventional property, could cost you one week of rental income, potentially running into thousands in a holiday home in peak season. It is possible to arrange an unsecured loan at short notice to deal with the costs of calling in expert trades and replacing key items at short notice.

Contact us about fast access to funds with a Short-term Loan.

Tax Loans - the answer to seasonal cash flow problems

Tax is an issue for every business. A large quarterly VAT or annual tax demand can cause problems with your cash flow, particularly if it falls at the same time as other costs, or in the middle of a slow season.

Tax Loans help you to spread the cost of your tax demands into affordable monthly payments, helping ensure that your business does not have to go through a cash-flow drought.

Benefits of a Tax Loan:

  • Better control of cash flow
  • Fixed monthly payments
  • Quick and simple to arrange
  • Avoids issues with HMRC and potential penalties

Goodwill Loans – funding property overseas

Goodwill Loans, also known as Capital Withdrawal Loans or Cash Outs, lets you access the value of a UK business or healthcare practice, without causing potential cashflow difficulties. They allow you to use the goodwill built up in the practice as the security for a loan. It can bring you a sum typically between £50,000 and £500,000, with repayments over terms up to 15years. Interest rates are agreed when the loan is taken out, and are variable - but will be significantly more favourable than those provided by other lending methods.

The Goodwill Loan can be used in any way that you wish. Many people use a Goodwill Loan to buy an investment property, including property overseas. It could provide a cost-effective way to fund a Holiday home as the basis for a new business.

Get our help finding the most competitive Goodwill Lending for your needs.

Working Capital Finance

Working Capital Finance is designed to boost the working capital available to a business. It's often used to provide cash to pay staff and suppliers while business is slow during periods of slower business, such as off-peak seasons or perhaps during a period of growth. It is usually designed to be repaid in the short- to medium-term, once the business and properties are back to operating close to full capacity.

Why you need Rangewell to find finance for your holiday homes

As a property owner, many lenders will be happy to lend to you to buy or develop property in the UK.

Buying or improving property abroad can be more of a problem. Many lenders are simply not able to provide any kind of funding for property outside the UK. At Rangewell, we know those that are.

Whether you have a straightforward, small-scale funding need for a single property, or require a complicated ‘Jigsaw’ funding plan made up of a combination of financial products for a major holiday home development in Britain or overseas, we can work with you to find the answers.

Call us now to get our experts working for you to find the most appropriate and affordable mortgages for holiday lets.

Get a mortgage for your holiday let

Launch or grow your holiday let business with Rangewell

Last update: 24 January 2024

Need finance in a hurry?

Contact our team today to find out your options

Call us020 4525 5312
ScheduleArrange a call-back

Frequently asked questions

Have a question?

Are holiday let mortgages more expensive?

The costs of running a holiday let will be higher because of the high turnover of tenants, and the chances of getting a mortgage of more than 60% to 75% of the property's value are lower than with a buy-to-let mortgage.

Is a holiday let a good investment?

Owning a holiday let can be financially rewarding, but it will only be profitable if you treat it like you would do any other successful business. 

You should carefully consider this decision before committing. You’ll need to understand the market, interest rates, and other influencing factors. 

The staycation market has been rising since Covid, and fewer people are looking to travel abroad. With the staycation trend looking to continue, this is an ideal time to invest in a holiday let. 

Short-term holiday lets tend to be more lucrative compared to long term rentals. This is because the weekly rates charged for holiday lets are significantly higher, which increases earnings. 

The biggest motivator for investing in a holiday let is combining owning your dream home with running a business while setting your holiday costs.  

What are the lending criteria for holiday let mortgages?

Each lender will have their own criteria, so speak to Rangewell for more information. 

To avoid a last-minute scramble when applying for an e-commerce business loan, there are key documents that you should gather when approaching a lender. 

Firstly, you should ideally apply for a loan before you need it. It would help if you had an idea of the lender's requirements before committing to a loan. You'll need to have the following documents on hand.

  1. Credit score: The lower the credit score, the higher the risk, but this doesn't mean to say you won't qualify for a loan if you have an adverse credit score. Businesses can check their credit scores online but may have to pay a fee to access a full report. 
  2. Annual revenue: Make sure you have accurate financial statements over the past two years. Many lenders will ask for copies of your bank account transactions so they can confirm cash flows that are reflected on your statements.
  3. Updated business plan: The lender will want to know how your loan will be used and how the company plans to grow, so ensure you have a ready-to-go business plan available. It should also include a plan on how to pay the money back. 
  4. Additional collateral: You'll need to provide a personal guarantee to the loan, or you can pledge additional collateral such as personal real estate or other financial resources.  

How much income do I need to get a holiday let mortgage?

Typically, it would be best if you made a gross (pre-tax) income of 125%-145% of the monthly mortgage repayments calculated at a 5.5% interest rate. In addition, most lenders will require you to own your own home and are above 21 years old. Each lender has different criteria. Speak to Rangewell for more information.

What are the alternatives to a holiday let mortgage?

Some alternatives to holiday let mortgages are:

Remortgaging your own home: If you have enough value in your current property, you can remortgage it to fund the purchase of a finished holiday let.

Cash purchase: Some investors might be able to afford a holiday let property outright with no mortgage.  

To find out more about your options, speak to Rangewell today! 

Download Rangewell’s free and detailed guide to Property Finance

Ebook tablet
Rangewell Ebook - Download Rangewell’s free and detailed guide to Property Finance

Download your Rangewell Business e-Book

Available in ePub, mobi and .pdf format

By clicking "Get your copy now" you agree to Rangewell'sTerms and Conditions and Privacy Policy.

You may be interested in...

How to Buy Property For Holiday Lets

How to Buy Property For Holiday Lets

UK holidays are more popular than ever. Following the COVID-19 pandemic and subsequent lockdowns, many British holidayma...

23 January 2023
Costs of Running a Holiday Let

Costs of Running a Holiday Let

Here at Rangewell, we’re experts in holiday let finance. Our team can identify the right lenders and help you tail...

9 January 2023
How to Start a Holiday Let Business

How to Start a Holiday Let Business

Find out how to start a holiday let business and secure the crucial finance you’ll need to purchase or expand your...

30 December 2022
How Do Holiday Let Mortgages Work

How Do Holiday Let Mortgages Work

From the country’s most coveted holiday cottages to new apartments built for short breaks in city centres, there&r...

30 December 2022