What’s the difference between buy to let mortgages and holiday let mortgages?

The main differences between these two are in how the lender calculates the loan size and how they expect the property to be used.

The mortgage choices for repayment method and interest rate are the same.

HOLIDAY LET MORTGAGE

These allow you to purchase a residential property with the aim of letting it to paying guests on a short term basis. They do not allow anyone to occupy the property and use it as their main residence. The lender looks at the holiday rental income over the low, mid and high seasons to calculate the maximum loan.

BUY TO LET MORTGAGE

These also allow you to purchase a residential property but letting needs to be via an Assured Shorthold Tenancy (AST) where the tenants stay longer term. It will not allow holiday lets. The loan amount is determined by the AST income.

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