Best Holiday Let Mortgage Rates Comparison

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

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

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. Generally, 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 circumstances.

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

• 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 property type, location, and how you plan to use it.
• Your credit history.
• Age limits can also apply.

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 can use their market knowledge 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 that 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.

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 is the potential added risk 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 broker-matching service. We’ll quickly assess your buy-to-let property ownership goals and then introduce you to a suitable mortgage advisor.

Just call 0330 818 7026 or make an enquiry for a free, no-obligation chat. We’ll connect you with a broker who has plenty of experience securing the best holiday let mortgage rates for their clients.