A Simple Guide to Getting a Holiday Let Mortgage in 3 Steps

Want to own a holiday property? You’ll need a specialist mortgage for that… here’s an overview of the process:

STEP 1: ASSESS YOUR ELIGIBILITY

Evaluate your eligibility. Note that you’re fishing in a smaller pond when it comes to lenders…

Each lender has their own criteria, although there are similarities. So, to start with, you’ll need a 20 to 25% deposit. And owning your own home is a plus. As well as a steady earned income.

These three things put you in a good position right from the start.

Take time to organise your finances. A clean credit score works wonders.

Research your options.

This is a niche area of the mortgage world so make sure you understand what lenders are looking for.

STEP 2: FIND A PROPERTY

If your eligibility is ready to party, it’s time for the fun bit.

Finding a suitable property.

Look for property-specific details. Ask relevant questions. Are there occupancy restrictions? What are the construction methods? And so on.

Make a shortlist based on the answers.

Aim for traditionally built properties, in good areas, with broad resale potential.

Making sure your property options will appeal to lenders is a must.

STEP 3: APPLY FOR THE MORTGAGE

When you’ve decided on the right lender, you can apply for your mortgage.

Get familiar with the holiday let affordability model.

This gives you an idea about potential rental income. Holiday letting agents are happy to provide rental forecasts, including gross annual income and seasonal rates.

Figuring out your borrowing capacity with these figures means you can choose a mortgage product that suits you.

Do the numbers based on fixed or variable rates, repayment options, or interest-only.

Get all your documents together, such as bank statements, pay slips, identification, proof of address, proof of deposit, and the rental forecast letter.

And there you have it, you can submit your application!

By following these three simple steps—assessing eligibility, selecting the right kind of property, and applying for the mortgage—you’ll be well on your way to owning your dream holiday let.

Have a chat with one of our advisors. We’re specialists in this type of mortgage.