Best Holiday Let Mortgage Rates Comparison

Thinking about buying a holiday let? Here’s what you can expect to pay with mortgage rates along with tips for finding the best deals.

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Home Mortgage Interest Rates Best Holiday Let Mortgage Rates Comparison
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Updated: March 15, 2024

If you’re considering buying a holiday let as an investment property, you’ll want to know what the best interest rates are currently for a holiday let mortgage.

The table below offers a snapshot of the interest rates available at the moment for these types of mortgages.

This article also outlines the differences between holiday lets and regular buy-to-let deals, and how you can accurately compare the best deals.

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Last updated May 2024

The rates quoted above were correct at the time of writing and are subject to change at any time at the lender’s discretion. Speaking to a mortgage broker is the best way to keep track of the rates available at any given time.

What is the typical interest rate for a holiday let mortgage?

The table at the top of this article gives you a good indicator of the interest rates available for this type of mortgage. In general you should expect the rate to be between 0.5%-1.5% above the Bank of England base rate. This can vary based on the property type, its location, and your personal circumstances.

The main eligibility criteria that can directly and indirectly impact the rates you can access includes:

  • The size of your deposit.
  • Your homeowner status (you usually need to own property), and whether you’re an individual or limited company.
  • The level and source of your income.
  • How much you’re looking to borrow.
  • Projected rental income for the holiday let.
  • The type of property, where it’s located, and how you plan to use it.
  • Your credit history.
  • Age limits can also apply.

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How to compare holiday let mortgage rates and deals

No matter your circumstances and investment goals, here are some straightforward steps to follow if you want to carry out an in-depth comparison of holiday let mortgages:

1. Speak to an expert advisor

If you already have an idea of the type of property you’re looking for and the finance you’ll need, a specialist holiday let mortgage advisor will be able to evaluate your chances of success. This allows them to give you a realistic understanding of where you stand and the borrowing options at your disposal.

2. Compare holiday let mortgage rates

Your broker will be able to use their knowledge of this specific market to find the right lenders and deals tailored to your needs.

They will explore all mortgage types (e.g. repayment, interest-only, part-and-part) and compare both variable and fixed rates to find you the right finance.

3. Apply for investment finance

Once you’ve decided on the mortgage lender and deal which best suits your needs the final step is to lodge your application.

Your broker can guide you through the process and help you gather all the necessary information and documentary evidence.

If you want to discuss your property investment goals with an expert holiday let mortgage broker, just make an enquiry. We’ll introduce you to a specialist advisor for free.

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Are holiday let mortgages more expensive than regular buy-to-lets?

Rates for holiday let mortgages do tend to be slightly higher than regular buy-to-let (BTL) mortgages. Although this isn’t always the case, it depends on the lender you deal with. The main reason for the difference in rates comes down to the potential added risk involved for lenders.

Holiday lets can be highly lucrative from an investment perspective, but the properties are intended for short-term lets (often a maximum of 31 days). So, lenders sometimes charge a higher interest rate than standard buy-to-lets because there’s less rental income consistency.

Standard BTL properties usually have minimum tenancies of 6 to 12 months with a fixed rent. The shorter rent duration for holiday lets means the rental income is more likely to fluctuate. This leads to more complex rental income projections that need to account for things like the low, mid, and high holiday seasons.

Why use Online Mortgage Advisor?

Finding the best rates and deals for a property intended for short-term holiday lets can be challenging without professional advice. Luckily, some mortgage advisors specialise in holiday let mortgages, allowing an accurate comparison to find you a tailored borrowing solution.

We offer a free broker-matching service. This means we’ll quickly assess your buy-to-let property ownership goals, and then introduce you to a suitable mortgage advisor.

Just call 0808 189 2301 or make an enquiry for a free, no obligation chat. We’ll put you in touch with a broker who has plenty of experience securing the best holiday let mortgage rates for their clients.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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