Holiday Let Mortgage UK 2026: Lenders, Criteria and How Much You Can Borrow

By Jake Stott, Knox Mortgages. Reviewed by an adviser authorised under Fort Advice Bureau, FCA FRN 972730. Published 27 September 2026. Last reviewed 27 September 2026.

A holiday let mortgage is a buy to let mortgage designed for a property that is rented to paying guests on short stays, typically a few nights to a few weeks, rather than to one tenant on a long-term tenancy. Instead of a single monthly rent, the lender assesses the property’s expected income across high, mid and low season, then tests that income against the loan at a stressed interest rate.

This guide explains how that assessment works with real lender numbers, which lenders offer holiday let mortgages in 2026, how much deposit you need, how the tax picture changed when the Furnished Holiday Let regime ended on 6 April 2025, and the local rules on business rates, licences and nights per year that decide whether a holiday let actually works. Lender criteria were checked on the lenders’ own intermediary documents in September 2026 unless another date is shown.

Holiday let mortgages at a glance

What is the difference between a holiday let, a holiday home and an Airbnb?

Lenders treat these as different risks, so the label on your application matters. A holiday let is an investment property let to holidaymakers on short stays. A holiday home, or second home, is mainly for your own use with little or no letting, and is financed with a residential second home mortgage, not a holiday let mortgage. “Airbnb” is a booking platform rather than a property type: a whole flat in a city let by the night through Airbnb is a short-term let, which some holiday let lenders accept and others do not. Serviced accommodation adds hotel-style services and can move into commercial lending.

Can I use a buy to let mortgage for a holiday home or holiday let?

No, not unless the lender specifically allows it. A standard buy to let mortgage assumes the property is let to one household on an assured tenancy. Letting it on short holiday stays breaches most standard buy to let terms and conditions, and so does using a residential mortgage for paid short lets. Lenders can treat that as a default, and landlord insurance may not pay out on a claim if the property is being used in a way the policy did not cover.

The right product depends on how you will use the property. If guests pay to stay for most of the year, you need a holiday let mortgage. If it is mainly for your family with the odd week let to friends, a second home mortgage may fit, and some lenders allow limited letting on those. If you are unsure, tell us the honest pattern of use you expect in year one and year three, and we will match it to the lender whose terms actually permit it. Getting this wrong is the most expensive mistake we see people make on this type of purchase.

How do lenders work out how much you can borrow on a holiday let?

Holiday let affordability is based on projected letting income, not your salary, and each lender has its own formula. Most ask a local holiday letting agent to confirm expected weekly rates for high, mid and low season. Leeds Building Society, for example, takes the average of those three rates and multiplies it by 30 weeks to get annual income, then applies an interest cover ratio of 170% and a stressed rate of product rate plus 2% (minimum 5.5%) on deals shorter than 5 years, or product rate plus 0.5% (minimum 5.5%) on 5-year deals, according to its criteria effective 24 August 2026.

Cumberland Building Society, in its January 2026 guide, instead deducts 20% from projected gross rent for letting agent costs and requires the net figure to cover 145% of interest at 5.5% or product rate plus 2%, whichever is higher, on deals under 5 years, or at the product rate itself on 5-year fixes. Principality requires 145% cover with a 5.5% minimum and applies product rate plus 2% on 2 and 3-year products. Same cottage, three different maximum loans.

Worked example: the same cottage at two lenders

A buyer is purchasing a £340,000 two-bed cottage on the Northumberland coast and wants to borrow 75%, which is £255,000. A local agent confirms weekly rates of £1,100 in high season, £800 in mid season and £500 in low season. Assume a 2-year fix at 4.5% and a 5-year fix at 4.9%. These rates are illustrative only.

Leeds method (30 weeks, 170% cover)

• Average weekly rate: (£1,100 + £800 + £500) ÷ 3 = £800
• Annual income: £800 × 30 weeks = £24,000, which is £2,000 a month
• £2,000 ÷ 1.70 = £1,176.47 monthly stressed interest allowed, or £14,117.65 a year
• 2-year fix stressed at 6.5% (4.5% + 2%): £14,117.65 ÷ 0.065 = £217,195 maximum loan
• 5-year fix stressed at 5.5% (4.9% + 0.5% = 5.4%, so the 5.5% floor applies): £14,117.65 ÷ 0.055 = £256,684 maximum loan

Cumberland method (20% cost deduction, 145% cover)

• Projected gross income £24,000, less 20% = £19,200 net
• £19,200 ÷ 1.45 = £13,241.38 a year of stressed interest allowed
• 2-year fix stressed at 6.5%: £13,241.38 ÷ 0.065 = £203,714 maximum loan
• 5-year fix tested at the 4.9% product rate: £13,241.38 ÷ 0.049 = £270,232, capped at 75% LTV so £255,000

On a 2-year deal the buyer is £38,000 to £51,000 short of the loan they wanted. On a 5-year fix both lenders support the full £255,000. This is the single most useful lever in holiday let lending, and it is invisible if you only compare headline rates. Your agent’s seasonal figures also need to be realistic: lenders’ valuers check them, and an optimistic projection that gets marked down at valuation causes more late problems than anything else.

Which lenders offer holiday let mortgages in 2026?

Holiday let lending is dominated by building societies, many based in tourist regions. The table shows criteria verified on each lender’s own intermediary material. Two changes affect older guides: Kent Reliance stopped new buy to let lending on 17 December 2025, and Precise’s buy to let products moved to OSB’s Rely brand, so check any list that still names them.

Other societies, including Vernon, Furness, Bath and Monmouthshire, publish holiday let ranges, and some mainstream banks have offered holiday let products in the past. We could not confirm a current dedicated Barclays holiday let product on its intermediary criteria pages in September 2026, so if a guide tells you Barclays does holiday lets, ask us to check the live position before you rely on it.

How much deposit do you need for a holiday let mortgage?

Plan for 25% as a minimum, and more if you are a first-time landlord or the rent is tight. Every main lender we verified caps holiday lets at 75% loan to value, and Leeds limits first-time landlords to 70%, with new build holiday let houses at 70% and new build flats at 65%. Searches for 80% or 90% holiday let mortgages are common, but in September 2026 we found no mainstream lender offering above 75% on a holiday let; anything higher would need a very specialist lender or additional security.

In practice the rental calculation often decides the deposit, not the LTV cap. In the worked example above, a buyer on a 2-year fix would need roughly £123,000 to £136,000 of their own money, not £85,000, because the rent only supports £204,000 to £217,000 of borrowing. Add stamp duty with the 5% higher rates surcharge, legal fees, furnishing (often £10,000 to £25,000 for a cottage), and working capital for the first quiet season.

Are holiday let mortgage rates higher than buy to let rates?

Usually yes, by a modest margin. Holiday let income is seasonal and less predictable than a single tenant’s monthly rent, so lenders price in the extra risk and the specialist underwriting. The bigger cost difference is often not the rate but the tougher stress test: an ICR of 170% at Leeds against 125% to 145% on its standard buy to let range means the same rent supports less borrowing. The “best holiday let mortgage” is therefore the one that combines a competitive rate with a stress test your rent can pass. That is frequently a 5-year fix, because several lenders test 5-year products at or close to the pay rate. For wider context see our buy to let mortgage rates guide and long-term fixed rates page.

How are holiday lets taxed now the FHL regime has ended?

From 6 April 2025 for income tax (1 April 2025 for companies), the Furnished Holiday Let tax regime was abolished. Holiday lets are now taxed under the same property income rules as long-term lets. For higher-rate taxpayers owning in their own names, this is the biggest change in holiday let economics in decades, and many online guides and agent brochures still describe the old rules.

Because interest relief is now restricted in personal names, more buyers are looking at holiday lets through a limited company, where interest is deductible against profit. Only some lenders accept companies: Cumberland does, Leeds does not. See our limited company buy to let mortgage page and take advice from an accountant before choosing.

What rules on rates, licences and nights per year apply to holiday lets?

Local rules decide whether a holiday let pays council tax or business rates, whether it needs a licence, and how many nights you can let. They also affect how lenders and valuers view the property.

Holiday lets fall outside the Renters’ Rights Act, in force in England from 1 May 2026, because guests occupy for a holiday rather than as their home. That has prompted some landlords to consider switching long lets to holiday use. Before you do, check your mortgage terms, your lease, any planning conditions and your insurance, because switching use without consent is a breach.

Which properties do holiday let lenders turn down?

Property type is the most common reason a holiday let case fails after the numbers work. Leeds excludes holiday parks and properties with local ownership or occupancy clauses, and does not accept studio flats. Many lenders dislike lodges, chalets and cabins, properties with seasonal occupancy restrictions under planning, non-standard construction, and leasehold flats where the lease forbids short lets. Cumberland needs 85 years left on a lease at the start of the mortgage and will not lend on flats in blocks over six storeys.

Can you get a holiday let mortgage if you are over 70?

Yes. Age matters less on buy to let and holiday let because the rent, not your earnings, services the loan. Leeds states there is no maximum age at the end of the term on holiday let, subject to its other criteria, while Cumberland requires the oldest applicant to be under 86 when the term ends. Older borrowers often choose interest-only, which most holiday let lenders offer, with a sale of the property as the repayment plan. If the plan is to pass the property on, factor in inheritance tax and get advice. Our mortgage over 60 guide covers the wider options.

Illustrative Knox case: Cornish cottage on a 5-year fix

This is an anonymised, illustrative case based on the kind of holiday let we place. It is not a quote or a promise of outcome.

A couple in Cheshire, both higher-rate taxpayers and first-time landlords, found a £395,000 cottage near Padstow. They had been told by a comparison site that they could borrow 75%. A local agent’s projection gave high, mid and low season rates of £1,450, £1,000 and £650 a week. On a 2-year fix with a 170% cover test, the loan came out well short of target, and as first-time landlords they were capped at 70% LTV with that lender anyway.

We moved them to a lender that uses a 20% cost deduction and tests 5-year fixes at the pay rate, which supported the full 75%, or £296,250. They chose to borrow £276,500, 70% LTV, to keep the payment comfortable in a weak season. We flagged before they offered that the FHL tax regime had ended, so their accountant modelled owning personally against a limited company. They bought personally because they planned to use the cottage themselves in retirement, and we checked the lender’s own-use rules matched that plan. The purchase completed in 12 weeks.

How long does a holiday let mortgage take?

Allow 8 to 12 weeks from application to completion on a straightforward purchase. The holiday let valuation takes longer to arrange than a standard one because the valuer checks seasonal income evidence, and remote rural properties can wait for a surveyor. Have ready: the agent’s written high, mid and low season projection, proof of deposit, 3 months of payslips or 2 years of accounts, and details of any other properties you own. An agreement in principle from the right lender before you offer puts you in a stronger position with the selling agent.

Frequently asked questions about holiday let mortgages

How much deposit do I need for a holiday let mortgage?

At least 25%. The main lenders we checked in September 2026, including Leeds, Cumberland and Principality, cap holiday lets at 75% loan to value. First-time landlords may be limited to 70%, and the rental calculation often means you need more than 25% in practice.

Can I use a normal buy to let mortgage for a holiday let?

No, not unless the lender specifically permits holiday letting. Standard buy to let mortgages assume one household on an assured tenancy, and letting on short holiday stays usually breaches the terms. You need a holiday let mortgage, or a second home mortgage if the property is mainly for your own use.

How do lenders calculate holiday let rental income?

Most use a local agent’s weekly rates for high, mid and low season. Leeds averages the three and multiplies by 30 weeks. Cumberland deducts 20% from projected gross rent for letting costs. The result is then tested against the loan at an interest cover ratio of 145% to 170% and a stressed rate.

Are holiday let mortgage rates higher than buy to let rates?

Usually slightly higher, because holiday income is seasonal and underwriting is specialist. The bigger difference is the stress test, for example a 170% interest cover ratio at Leeds. A 5-year fix is often the best value because several lenders test it at or near the pay rate, supporting a larger loan.

Can I get a holiday let mortgage through a limited company?

Yes, with some lenders. Cumberland Building Society lends to limited company SPVs on holiday lets, while Leeds Building Society does not accept companies. Since the FHL tax regime ended in April 2025, higher-rate taxpayers often compare personal and company ownership with an accountant first.

Can I stay in my own holiday let?

Usually for limited periods, but rules vary by lender and some restrict use by family members. Leeds, for example, states the property must not be occupied by a family member. If personal use is the main purpose, a second home mortgage is likely the right product instead.

Is an Airbnb mortgage the same as a holiday let mortgage?

Often, but not always. Airbnb is a platform rather than a property type. A coastal cottage let on Airbnb is a holiday let. A city flat let by the night is a short-term let, which some holiday let lenders accept and others do not. In London, whole homes are limited to 90 nights a year without planning permission.

Do I pay stamp duty surcharge on a holiday let?

Yes, if it is an additional residential property. In England the higher rates add 5% of the price to standard stamp duty. In Scotland the Additional Dwelling Supplement is 8%, and Wales charges its own higher Land Transaction Tax rates.

Speak to a holiday let mortgage broker

Knox Mortgages is a whole-of-market, FCA-regulated broker. We run your seasonal figures through each lender’s own formula before you apply, so you know the real maximum loan, the right product length and the right structure. Book a free, no-obligation discovery call and we will tell you straight what is realistic.

Book a free discovery call

---

Your home may be repossessed if you don’t keep up repayments on your mortgage.

Knox Mortgages is a trading style of Fort Advice Bureau which is regulated and authorised by the FCA to conduct Mortgage and Protection business, FRN: 972730