Holiday-Let / Short-Term-Let Mortgages – Finance Your AirBnB or Staycation Cottage
(Turn nightly bookings into an income stream—here’s how to fund the property.)
Quick Summary
Purpose: Buy or remortgage a property let on a nightly/weekly basis to tourists or business travellers.
Max LTV: 75 % (some lenders 80 % with strong income projections).
Affordability: Based on projected holiday-let income, not AST rent—lenders use 145-170 % ICR at 5.5-8 % stress rate.
Key lenders: Leeds BS, Cumberland BS, Furness BS, HSBC (select postcodes), DPS Paragon (Ltd-co).
Ideal borrowers: Those with 25 % deposit, good credit and a viable location – coastal, national park, university city, or major events hub.
1 | Holiday-Let vs Standard Buy-to-Let
| Feature | Holiday-Let Mortgage | Standard BTL Mortgage |
|---|---|---|
| Tenancy type | Short stays (max 31 or 90 days each) | 6-12 m AST |
| Income basis | Projected gross rents × 30-45 wks/yr | Fixed monthly rent |
| Max personal use | 60-90 days/yr (varies) | Usually none |
| Reg requirements | Furnished Holiday Let rules for tax relief | Standard landlord regs |
2 | Lender Criteria Snapshot
| Lender | Max LTV | Min income | Location rules | Notes |
|---|---|---|---|---|
| Leeds BS | 75 % | £40k | England & Wales tourist spots | Personal or Ltd-co; min 30 wks occupancy forecast |
| Cumberland BS | 75 % | £30k | Holiday hotspots Scotland/England | Allows 90 d personal use |
| Furness BS | 80 % | none | Mainland UK | Stress test on lower of AST or 30-wk projection |
| Paragon | 75 % | £0 (Ltd-co) | England/Wales | Portfolio landlords; Airbnb ok |
3 | Costs & Fees
| Item | Range |
|---|---|
| Product fee | £0 – £1,995 |
| Valuation | £375 – £1,000 (depends on location & size) |
| Arrangement / broker | 0 – 1 % of loan |
| Interest rate | 5.99 – 7.49 % 2- & 5-yr fixes |
| Legal (Ltd-co) | £1,200+ dual-rep |
4 | Tax & Regulation
Furnished Holiday Let (FHL) status:
Let at least 210 days/yr & actually let 105 days to claim mortgage-interest relief and capital allowances.
Council rules: Some areas (e.g. parts of Cornwall, Wales) require change-of-use or planning permission for new holiday lets.
Business rates: Small Business Rates Relief may replace council tax if available >140 days/yr.
Consult an accountant before purchase.
5 | Application Checklist ✅
25 %+ cash deposit (or equity via remortgage).
12-month letting agent income projection or AirDNA report.
Personal income evidence (some lenders waive if rental strong).
Existing property experience helps but not mandatory.
Consent from main residence lender if raising deposit via further advance.
6 | Timeline
Decision in Principle – 24 h.
Valuation (incl. demand study) – 1-2 weeks.
Formal offer – 3-5 weeks.
Completion – 6-10 weeks (faster on remortgage).
7 | Risks & Mitigations
| Risk | Mitigation |
|---|---|
| Seasonal voids | Build 3-month cash buffer |
| Local planning changes | Check council policy before exchange |
| Interest-rate hikes | Fix 5 years; stress test at 8 % |
| Clean-up & management time | Use reputable agent (15-25 % fees) |
📞 Ready to Compare Holiday-Let Lenders?
We’ll connect you with a specialist broker who places short-term-let cases daily.
See max LTV and projected-income calculations up-front
Indicative offer within 48 h once projections received
Free, no-obligation introduction