Holiday Let Mortgage Criteria – Top Tips

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    The lending criteria for holiday let mortgages is different to traditional or buy to let mortgages. With fewer lenders in the holiday let market, it’s important to understand the criteria you’ll have to meet in order to get a mortgage. Each lender will have their own set of criteria for holiday let properties, ranging from minimum income requirement to minimum loan value. Here’s some holiday let mortgage criteria that you should be aware of.

    Minimum income

    Lenders will usually stipulate a minimum income requirement. The minimum income will vary depending on the lender; it could be anything from £10,000 to £40,000.

    The minimum income requirement will also be affected by your status as either a sole or joint applicant. For example, for a sole applicant the minimum income could be £20,000; for a joint applicant, one applicant must earn a minimum of £20,000 or there should be a combined joint income of at least £30,000.

    You’ll need to provide the lender with your employment figures if you are employed, or the last three years of accounts, if you run a business, as proof that you meet the criteria for minimum income.

    Rental income

    Mortgage lenders will typically expect you to make a gross rental income from your holiday let that is 145% of the mortgage repayments, when calculated at 5.5% interest rates. This is known as a stress test.

    As there are strict criteria which need to be met, lenders will require proof of gross rental income to ensure that the monthly mortgage repayments can be met by the holiday let property. To get an estimation, it’s advisable to consult a reputable holiday letting agent who can provide a realistic rental projection.

    At present, lenders are generally not willing to accept rental figures created by the property owner if they are self-marketing using a platform such as Airbnb. Therefore, in order to get a holiday rental mortgage, using the services of a professional agent is essential.

    The property

    To get a holiday home mortgage, your property must be considered as suitable security to allow for lending. Lenders will look into the title deeds of any prospective holiday let property to ensure that there are no easements or covenants that might limit the property’s use as a dwelling; this could impact the value of their security. They will also be keen to understand if the property deeds contain any clauses that might prevent holiday letting as an activity.

    You’ll also need to meet the criteria for the minimum property value of £50,000, irrespective of location.

    Maximum portfolio

    Some mortgage lenders will have a limit on the number of holiday let properties in your portfolio. For example, if you hold buy to let properties, the lender might state a maximum portfolio of 10 mortgaged rental properties. Some holiday let lenders will only allow one holiday let in your portfolio, while others are more flexible.

    Personal situation

    If you’re applying for a holiday let mortgage, you must already own your own home and be over the age of 21.

    Whilst it’s normal to see holiday let mortgage applications for single and joint owners, most lenders will allow up to four applicants to be named on the application form. However, not all will be counted when it comes to the affordability test!


    You’ll need a reasonable deposit when applying for a holiday home mortgage. Typically, expect to pay a minimum deposit of 25% to 30%, while interest rates and fees tend to be only slightly higher than mainstream residential mortgages.

    Maximum loan to value (LTV)

    LTV is the maximum amount a lender will agree to loan you as a percentage of the property’s value. If you’re applying for a holiday let mortgage, the maximum LTV will be around 75%, so you’ll need a minimum deposit of 25%.

    Minimum and maximum loan sizes

    Lenders tend to specify an absolute minimum and maximum that they are willing to lend on a holiday let mortgage.

    The minimum will vary depending on your lender but is likely to be around £30,000, whereas the maximum loan size is around £750,000 and can sometimes be capped at certain LTV levels. For example, at the date of publication, Principality Building Society will not lend more than £500,000 if the LTV is 75%.


    While you’re allowed to stay in your holiday home from time to time, you’re not permitted to live in it full-time as your dwelling. Lenders will stipulate occupancy restrictions on the use of your property which you must adhere to.

    The full details about holiday home occupancy restrictions can be found here.

    Andy Soye Profile Photo

    Andy Soye

    Founder @ Holiday Cottage Mortgages
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      The information contained in this article is accurate at the time of writing, based on our research. Rules, criteria and regulations change all the time and so please speak to one of our Consultants to confirm the most accurate up to date information. Nothing in this article constitutes financial advice. You understand that by clicking any external links on this page that you will be leaving the website of Holiday Cottage Mortgages and we cannot be held responsible for the content of this external website. Please always consult your accountant or solicitor for all financial, taxation or legal matters.