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About
Established in Newport in 1869 to help local people build homes, we now help people across Wales and England buy properties and save for their future.
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Holiday Let Purchase and Remortgages
Our underwriting process is guided by our expertise rather than computer formulas and credit scores - ideal for specialist solutions like Holiday Let Mortgages.
  • We will consider first time landlords
  • We offer products up to 75% LTV
  • We lend up to age 85
Our Holiday Let Mortgage Criteria

LENDING AREA

  • England and Wales (including Isle of Wight)

MAXIMUM LTV

  • 75% LTV
LOAN SIZE
  • Minimum loan £40,000
  • Maximum loan £1,000,000 for any single property
  • Maximum combined loan of £2 million for multiple holiday let properties
  • You can have a maximum of 3 holiday let properties mortgaged with the Society at any one time
PROPERTY
  • Property must not be on a holiday park or have any restrictions regarding occupancy
  • Property must be standard construction
TERM
  • Minimum Term 5 years
  • Maximum Term 40 years
APPLICANT(S)
  • Minimum age 21
  • Maximum age 85 based on the oldest applicant
  • At least one of the applicants must be an existing owner-occupier
  • We will lend to first time landlords
  • At least one of the applicants must have a minimum income of £25,000 that is not derived from rental income
  • If term goes beyond retirement age we will not require proof of pension income
RENTAL COVERAGE
  • Minimum rental coverage of 145% (of mortgage interest payment) based on the initial pay rate plus 2%; or 5.5%, whichever is greater (our Holiday Let Mortgage Calculator will help you work this out)
  • For purchases - Holiday Letting Agent letter to be provided confirming known or anticipated weekly rent in low, medium and high season. Average taken of these three and multiplied by 30 to give a yearly figure.
How to Apply

 

If you're looking for a Holiday Let mortgage for yourself, our Mortgage Advisers will be able to answer any questions and assist with your application.

Speak to an Adviser

 

Brokers and Intermediaries

 

If you are a Mortgage Broker or Intermediary, our dedicated Broker Team is available to explain our application process. 

Broker Team

Holiday Let Mortgage FAQs

What is a Holiday Let Mortgage?

 

Holiday Let Mortgages are loans designed for properties that will be let as holiday accommodation.

Not many lenders offer Holiday Let mortgages, as they are considered a specialist type of borrowing. 

But that doesn't mean it has to be more difficult to get one! 

At Monmouthshire Building Society we have years of experience in the Holiday Let industry.

Your mortgage will be handled by Holiday Let Mortgage experts, so the process should be just as straightforward as a standard Buy-to-Let mortgage.

Speak to an Advisor

How Much Can I Borrow?

 

This depends on several factors, such as:

  • The lender’s minimum and maximum loan size. 
  • How much you can afford to borrow - the lender will carry out an affordability assessment based on your circumstances, such as income and employment status.
  • The type of property and earning potential of the property.

Holiday Let Mortgage Calculator

If you know how much annual rental income a property is likely to make, you can use our Holiday Let Mortgage Calculator to find out how much we might lend towards that property. 

Holiday Let Calculator

How Much Deposit Do I Need?

 

This depends on the Loan to Value (LTV) of the mortgage.

Our Holiday Let Mortgages are available up to 75% LTV – so you can take out a Holiday Let Mortgage with as little as 25% deposit.

Should I Invest in a Holiday Let or a Residential Buy-to-Let?

 

Here are some things to consider when deciding between a Holiday Let property and a traditional Buy-to-Let:

Tax Relief is being cut on Buy-to-Lets - but not on Holiday Lets.

The Government is in the process of cutting the Mortgage Interest Relief for residential Buy-to-Lets.

This means that from 2020-2021 onwards, finance costs will no longer be an allowable deduction from property income. This will be replaced by a basic rate tax reduction.

At the moment Furnished Holiday Lets aren’t subject to these changes, as they are seen by HMRC as a trade rather than an investment. 

This means that as well as being eligible for certain Capital Gains Tax reliefs and capital allowances, the owner of a furnished holiday let may continue to deduct 100% of mortgage costs from their property income.

Holiday Lets have the potential to give you a bigger return on investment.

Holiday Lets have the potential for a higher yield than Buy-to-Let properties.

For example, in high season Holiday Let properties can make more in one weekend than a similar Buy-to-Let property makes in a month!

Holiday Let rental income is less reliable.

With Buy-to-Lets, tenants are provided with an Assured Shorthold Tenancy Agreement.

This means you can expect regular rental income for at least 6 – 12 months each time you sign a new tenant.

With Holiday Lets, there’s a lot more uncertainty over whether your property will be booked, and they can take longer to get established to the point where you're bringing in regular income.

There are also seasonal fluctuations in income with Holiday Letting due to high and low season.

There’s more work involved in Holiday Letting.

Holiday Lets are a lot more time consuming than Buy-to-Let properties.

You’ll have to market your property, manage bookings, reply to enquiries and make sure your online listings are up to date.

There are more overheads with Holiday Letting.

As a landlord of a residential Buy-to-Let, property maintenance is your responsibility.

However, paying the bills and keeping the property clean is usually down to your tenants.

With holiday letting, it's all down to you.

You have to provide all the furnishings, pay the utility bills and make sure the property is clean for each guest.

What Should I Think About When Choosing a Holiday Let Property?

 

Choosing the right property will boost your chances of being accepted for a Holiday Let Mortgage. 

Here are some things to consider when choosing a Holiday Let property:

  • Choose a popular tourist area - for example, a seaside town, a major city or a national park.
  • Research the demand for properties in the area. If properties are usually booked up in advance, that bodes well for your investment! Remember to check in both high and low season to get the full picture.
  • If the property is already being used as a Holiday Let, check how much rental income it currently makes. You could boost this with some refurbishment and marketing, but it’s good to know as a starting point.
  • Check out the competition. What rates are similar properties advertised at throughout the year? This will give you a good idea of what you should charge.
  • Remember that while you can make changes to the property itself, you can’t change its location. Is it in walking distance to the local amenities? What about a pub, or the beach? Does it have a good view? These are all things which will attract holiday makers and help your property stand out.
Our Holiday Let Mortgages

Holiday Let Mortgage Rates - Purchase

Our Holiday Let mortgages can help you buy properties in holiday hotspots across Wales and England.

2 Year Discount Rate Holiday Let Mortgages
Initial interest rate % Overall cost for comparison Maximum loan to value Product fee Additional Features  
2.25% 4.9% APRC 75% £999 - More details

Holiday Let Mortgage Rates - Remortgage

Make your holiday let more profitable by getting a better mortgage deal.

2 Year Discount Rate Holiday Let Remortgages
Initial interest rate % Overall cost for comparison Maximum loan to value Product fee Additional Features  
2.50% 4.8% APRC 75% -

-

More details

All our mortgages move onto our Standard Variable Rate after the initial rate period. Our Standard Variable Rate is currently 5.24%. If our Standard Variable Rate changes, your monthly repayments could go up or down.

IF YOU FAIL TO KEEP UP WITH PAYMENTS ON YOUR MORTGAGE A ‘RECEIVER OF RENT’ MAY BE APPOINTED AND/OR YOUR PROPERTY MAY BE REPOSSESSED.