How to finance your holiday-let: the main market players compared


Understanding the ins and outs of mortgage options is never simple, yet nowhere is this more apparent than when trying to acquire finance for holiday-lets. Amidst the garbled jargon, complicated figures and shifting terms and conditions, it can be hard to grasp the core facts. Below we summarise the key lenders, what they offer and the experiences of people who have sought finance for holiday-lets themselves.

If you’re interested in serviced accommodation, then why not check out our free SA resources including a deal analyser, styling guide and essential shopping list?

Firsthand experiences

Property developer Chris Cottage is currently in the process of obtaining finance for a serviced accommodation property. He is using CopoFI, a company which specialises in short-let mortgage solutions.

It’s the first time he has tried to get finance for SA and he says the complexity has taken him by surprise.

‘I had to give them all the information on my existing properties,’ he says. ‘In terms of what they’re worth, what I paid for them, what the outstanding balance is, the mortgage payments, the rent payments, what the cash flow is at.

‘It doesn’t sound too bad now, but at the time it was quite a daunting task.’

Dale Smith of Investicity
Dale Smith

Property investor Dale Smith says that whilst obtaining finance for holiday-lets remains difficult – mainly due to the shortage of lenders – the process has recently become a lot easier.

‘If you go  back 12 months or 18 months it was quite tough,’ he says.

‘It’s becoming easier. There’s more appetite for it in the market. There are lenders coming to the market who haven’t done holiday-let funding historically.’

He says that a market previously dominated by a few building societies such as Leeds and Cumberland is slowly changing as new lenders move into the market.

Foundation Home Loans and Precise are two lenders he mentions who have recently entered the short-let market.

‘They are underwriting the business based upon the buy-to-let income but then giving permission to do short-lets,’ he says.

The traditional holiday-let lenders

Leeds Building Society

Photo: Betty Longbottom
Photo: Betty Longbottom

Leeds Building Society offers 2 and 5 year fixed rate mortgages for holiday lets:

2 Year Fixed Rate Mortgage

Max 60% LTV
5.2% APRC

Max 70% LTV
5.3% APRC

5 Year Fixed Rate Mortgage

Max 70% LTV
4.9% APRC


Maximum holiday-let loan: £500,000.

Free standard valuation: (up to) £999.

Product Fee: £999

People with 4+ mortgaged rental properties may only contact Leeds through a mortgage broker to obtain finance.


Customers are allowed to pay up to 10% of the borrowed amount plus the accrued interest each year without incurring an early repayment charge. After this allowance, the early repayment charges are tapered: the more you pay back, the greater the charge.

Further information


Photo: Kenneth Allen
Photo: Kenneth Allen

Cumberland offer 3 year fixed rate mortgages for holiday-lets:

3 year fixed rate mortgage

Max 60% LTV
3.35% APRC

Max 70% LTV
3.75% APRC

Max 75% LTV (this deal is only available for established holiday-lets)
4.24% APRC


In making a decision on allocating finance, Cumberland consider personal income as well as  all assets and liabilities.

Minimum mortgage: £75,000

Minimum property value: £150,000


Maximum mortgage term: 25 years

Customers’ annual net rental income from their holiday-let property has be a minimum of 125% of the annual mortgage interest at 6.25%, or 3% above the mortgage rate you are paying, whichever is higher. 

Allowance before early-repayment charge: 10% of outstanding balance, as at 1st April every year.


Properties with occupancy restrictions aren’t eligible for holiday-let mortgages, nor are people with 4+ mortgaged properties. However, neither minimum income nor home ownership is required to get a holiday-let mortgage.

Further information

Tipton and Coseley Buidling society

Photo: Gordon Griffins
Photo: Gordon Griffins

Tipton and Coseley offer 2 year fixed rate mortgages for holiday-lets:

Max 75% LTV
4.4% APRC

2.49% 2 year fixed rate
4.99% Standard Fixed Rate (SFR)

Arrangement Fee: £999

Interest rate floored at 2.49%

They also offer 5 year fixed rate mortgages for holiday-lets:

Max 75% LTV
4.3% APRC

2.99% 5 year fixed rate
4.99% SFR

Arrangement Fee: None

Interest rate floored at: 2.99%


Minimum mortgage: £50,000

Maximum mortgage: £750,000

Minimum property value: £75,000

Minimum property value within M25 corridor: £750,000

Tipton and Coseley will accept mortgage applications for Airbnb properties.


Minimum mortgage term: 5 years

Maximum mortgage term: 35 years

Customers are allowed to pay 10% of the original mortgage amount each year without incurring an early repayment charge. The early-repayment works out at 2% of the amount repaid in the first year plus 1% of the amount repaid in the second year.

Further information

The new short-term lenders

Photo: Taz Wake


Precise recently started accepting holiday-lets on its buy-to-let mortgages.


Max 75% LTV

Maximum mortgage: £500,000

Minimum income: £45,000 per annum

Minimum age: 25
Maximum age: 80

Minimum property value outside London: £50,000
Minimum property value inside London: £150,000


Minimum mortgage term: 5 years

Maximum mortgage term: 35 years


The mortgages can’t be used on serviced accommodation properties. The holiday-let that the mortgage is for must be established. Airbnb properties are not allowed.

Customers must have held at least one buy-to-let property in the 12 months prior to the application. New holiday-lets and new buy-to-let landlords aren’t eligible.

A maximum of 20 buy-to-let loans are allowed with Precise. An unlimited amount is allowed with other lenders.

Further information

Precise’s mortgage product guide

Precise’s mortgage criteria

Foundation Home Loans

Since July 2018, Foundation Home Loans has offered both 2 year and 5 year fixed rate mortgages for holiday lets.


Max 75% LTV

Fixed rates from 2.99% for 2 and 5 years.

No minimum income required

Application fee: £125

Minimum mortgage term: 5 years

Maximum mortgage term: 30 years


Over payments of up to 10% are allowed every year.


Foundation Home Loans only accept mortgage applications through intermediaries. Their mortgages are not available for first time buyers.

Further information 

All rates were accurate at the time of writing but subject to change, which is why anyone seeking finance should prioritise finding a knowledgeable broker to work with. 


If you’re interested in serviced accommodation, then why not check out our free SA resources including a deal analyser, styling guide and essential shopping list?


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