Mortgage guide
Holiday Let Mortgage Allowing Personal Use
One of the key attractions of owning a holiday let is the ability to use the property personally, but the amount of personal occupation permitted while retaining a holiday let mortgage varies by lender and must be carefully managed.
Holiday Let Mortgage Allowing Personal Use
Personal Use of Holiday Let Properties
One of the key attractions of owning a holiday let is the ability to use the property personally, but the amount of personal occupation permitted while retaining a holiday let mortgage varies by lender and must be carefully managed.
Personal Use and Holiday Let Mortgages
Holiday let mortgage lenders allow personal use on the basis that the property’s primary purpose remains commercial letting. As a result, lenders set clear limits on how many days the owner may occupy the property each year without breaching mortgage terms.
Typical Lender Allowances
- Standard allowance: Many holiday let lenders permit up to 90 days of personal use per year. This is the most common threshold and provides flexibility to enjoy the property during quieter periods without affecting mortgage eligibility.
- More restrictive policies: Some lenders impose tighter controls on personal use and do not permit owner occupation at all. These restrictions are typically designed to maximise rental availability and reduce the risk of the property being treated as owner-occupied rather than a commercial holiday let.
Exceeding the permitted personal use can result in the property being reclassified as a second home or residential property, which may breach mortgage conditions and create tax and compliance issues.
Holiday Home Buy-to-Let Mortgages
These personal use allowances are particularly relevant to holiday home buy-to-let mortgages, where lenders specifically allow owner occupation alongside short-term letting. Many lenders in this space explicitly allow up to 90 days’ personal access per year, making them suitable for borrowers seeking both investment income and lifestyle use.
However, not all buy-to-let lenders permit personal occupation, so lender selection is critical.
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Holiday let mortgage criteria
For context, these are the wider product terms covered by this guide. Availability and eligibility depend on your circumstances and the lender.
| Criteria | Detail |
|---|---|
| Max LTV | 80% |
| Minimum loan | None |
| Maximum applicants | None |
| Non-Homeowners | Acceptable |
| Occupancy restrictions | Acceptable |
| Below market value | Acceptable |
| Day one re-mortgage | Acceptable |
| Expats | Yes |
| Foreign nationals | Yes |
| Locations | England, Wales, Scotland and Northern Ireland |
For context, these are the wider product terms covered by this guide. Availability and eligibility depend on your circumstances and the lender.
| Feature | Detail |
|---|---|
| Loan to Value (LTV): | Up to 75% |
| Interest Rate: | Fixed at 4.75% for 5 years |
| Product Fee: | £995 |
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Frequently asked questions
What is a holiday let mortgage?
A holiday let mortgage is a specialist mortgage for properties rented short term to holidaymakers. It differs from residential and buy-to-let mortgages by assessing affordability on projected holiday income, applying seasonal stress testing, typically requiring higher deposits, and allowing limited personal use only where lender criteria permit.
What is the interest rate for a holiday let mortgage?
Holiday let mortgage interest rates typically start from around 4.75% at 75% loan-to-value for standard residential holiday lets, depending on lender, property type, and fees. Rates are usually slightly higher than buy-to-let mortgages due to specialist underwriting, while commercial holiday lets are priced at higher commercial mortgage rates.
What is the minimum deposit for a holiday let mortgage?
The minimum deposit for a holiday let mortgage is usually 20%, available with a limited number of specialist lenders. Most holiday let mortgages require a 25% deposit, which provides wider lender choice and better pricing, while more complex or restricted properties may require higher deposits.
What makes a holiday let "restricted"?
A holiday let is restricted where planning conditions, a lease, or title covenants limit it to holiday use only, prevent permanent residence, impose seasonal occupancy limits, or tie its use to a holiday park, lodge site, or managed scheme.
Why do holiday let properties have restricted occupancy?
Occupancy restrictions keep holiday let properties available for short-term rental, supporting local tourism and preventing the properties being used as permanent residences.
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