Holiday let mortgages for everyone
Whether you’re a big fan of staycations personally and looking to invest in a high demand area, or simply looking to purchase a property from which you can receive rental income from short-term lettings, we’re here to help.
We offer a range of mortgages specifically designed for properties to be used as a holiday let in England and Wales. We can lend up to 75% loan to value, meaning you would need to put down a deposit of 25% or more on your purchase. Our Holiday let mortgages are available to applicants with any occupation - not just for teachers and education professionals.
PLEASE NOTE: YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
You might be wondering why a teacher specific building society offers holiday let mortgages to borrowers of other professions. It’s a good question. There are two reasons. Firstly, (like all lenders) its our duty to keep both our business and your money safe, and to do that we follow regulator rules around how many of our mortgages are to borrowers with small deposits and how many are to people with much bigger deposits. Offering holiday let mortgages (requiring at least a 25% deposit) balances out the small deposit mortgages we offer to teachers. Secondly, we think having a specialism – like lending to teachers – is a really good thing. So instead of offering our lowest deposit mortgages to the masses, we decided to apply our specialist knowledge to the holiday let market.
We:
• Lend up to £1 million at 75% Loan To Value.
• Calculate lending based on projected average rental income. For remortgages, we use 100% of rental received.
• Offer free property valuations up to £800k.
• Support borrowers who plan to market their home for rent through AirBnB type platforms.
• Allow personal use of the property for up to 2 months per 12 month period.
You’ll need
• A 25% deposit.
• A minimum income of £25,000 or for joint applications a combined income of £40k.
• To have fully repaid the mortgage by the age of 83.
Our current holiday let mortgage rates are listed below – for more information get in contact with our friendly team.
Variable rate mortgages
| Deposit % | Term | Initial interest rate |
Follow on rate |
Overall cost for comparison |
Max LTV |
Arrangement fee |
Application fee |
|
|---|---|---|---|---|---|---|---|---|
| 25% | 2 years | 6.14% |
9.49% |
9.2% APRC | 75.0% | £0.00 | £0.00 | Details |
Variable rate remortgages
| Deposit % | Term | Initial interest rate |
Follow on rate |
Overall cost for comparison |
Max LTV |
Arrangement fee |
Application fee |
|
|---|---|---|---|---|---|---|---|---|
| 25% | 2 years | 6.14% |
9.49% |
9.2% APRC | 75.0% | £0.00 | £0.00 | Details |
Fixed rate mortgages
Fixed rate remortgages
Representative example
Please note this is a representative example based on the mortgages in the tables above. To see a representative example specific to a single product please click the black 'details' button next to the mortgage in the table. When you apply for a mortgage you will be provided with details of how the specific mortgage deal you are interested in applies to your personal circumstances.
A mortgage of £206,550.00 over 27 years initially on a discounted variable rate of 6.14% (equal to a 3.35% discount off our SVR) for 2 years and then our Standard Variable Rate, currently 9.49%, for the remaining term, would require 24 monthly payments of £1056.85 and 300 monthly payments of £1624.58.
The total amount payable would be £719,433.23 made up of the loan amount plus interest (£512,773.23) with a Funds Transfer Fee of £25.00 and a Mortgage Exit Fee of £85.00.
The overall cost for comparison is 9.2% APRC representative.
Please note: the representative example is for a holiday let house purchase only. For remortgage applications, certain fees do not apply. Please contact us for details.
Holiday let mortgage FAQ's
A holiday let mortgage is specifically designed for a property that will be let out on a short term basis to holidaymakers in return for rental income. It differs from a buy to let mortgage which is for properties where the landlord receives a regular rental income from a tenant. Holiday let mortgages allow the owner to use the property themselves, for up to 2 months in every 12 month period. Both types of mortgage are not regulated by the FCA.
You will need:
- A deposit of at least 25% of the property’s value
- One applicant must earn a minimum income of £25,000 or joint applicants need to earn £40,000 per year
- To own a main residential home
- The property to be located in a typical, coastal or country, holiday let location
- A rental assessment - For purchase applications, we’ll look at the projected rental income as part of our assessment, whereas remortgage applications are assessed on the rental received over the last 12 months. One of our mortgage advisors will be happy to give you more information on how we assess your application
With Teachers Building Society holiday let properties that will be marketed through Airbnb type platforms are welcomed.
To secure a holiday let mortgage you’ll need a deposit of at least 25% of the value of the property. You’ll also need to make monthly repayments on your holiday let mortgage, as you would for a standard residential property, so make sure you plan for periods where you may have holiday let voids as your mortgage payment will still need to be made.
Other things to consider are the costs of insurance, taxation, marketing, maintenance and repair of your property plus any furnishings you need to purchase to make the home suitable for paying guests. You might also plan to use a specialist cleaning company to keep the property up to standard between visitors – costs can vary based on region and property size so investigate with a local provider.
The biggest difference is the length of tenancy. For holiday home mortgage properties guests will be staying for short periods (up to a maximum of one month). Whereas, a buy to let will be for a longer, continuous tenancy to the same person/family.
The first step in arranging a holiday let mortgage is to talk to one of our expert team. You can either give us a call on 0800 378669 or complete this form and one of our team will give you a call back at a time convenient to you.
Whether you’re a big fan of staycations personally and looking to invest in a high demand area, or simply looking to purchase a property from which you can receive rental income from short-term lettings the benefits are clear:
- The long term trend for bricks and mortar is a rise in value, offering an opportunity for capital gains over the period you own the property
- Holiday let properties enable regular receipt of income - whilst location and season will impact what you can charge, income can be higher than from a long term buy to let home
- You can use the property yourself to enjoy staycations: Teachers Building Society holiday let mortgages allocate 2 months in every 12 month period for owner use
At Teachers Building Society holiday let mortgages allow owners to self-occupy the property for up to 2 months in every 12 month period, plenty of time to make the most of your investment with family and friends.
Teachers Building Society welcomes mortgage applications for holiday let mortgages where the property will be rented out via an Airbnb type platform.
Platforms like Airbnb have certain standards/criteria which need to be met for a property to be listed – we recommend researching these directly with the platform.
The short answer is no.
Although we are a teacher specific building society and our residential lending requires one applicant to hold a teacher profession connection, we are happy to consider holiday let applications from any profession.
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Please note: Mortgages are secured on your home. You could lose your home if you do not keep up payments on your mortgage. Terms and conditions apply. Mortgages are subject to underwriting and criteria. Please contact us for full details.