The difference between holiday let and buy-to-let mortgages

On the latest Host Planet Mortgage Podcast, broker Beth Taylor from House & Holiday Home (HHH) Mortgages breaks down the key ways holiday let finance differs from buy-to-let – and why those differences should guide your strategy.

1. Fewer lenders (but growing interest)

Buy-to-let has a deeper bench of lenders; holiday let is a smaller, more specialised pool. That said, lender appetite is rising – competition is likely to increase over time.

2. Personal use is allowed

A major perk: lenders permit owner stays on holiday let products (often within set limits). With BTL, personal use isn’t an option. If you want the flexibility to block dates for family trips, a holiday let mortgage wins hands-down.

3. Pricing works differently

Holiday let mortgages typically carry slightly higher interest rates and product/arrangement fees. The smart move is to compare total cost, not just the headline rate – this is where a broker earns their keep.

4. Affordability is based on seasons – not AST rent

BTL affordability usually keys off monthly rent and an interest coverage ratio. Holiday let lenders often model low/medium/high season weekly income averages, frequently supported by a credible agent projection to show expected earnings. That seasonal approach can unlock higher borrowing than a BTL calculation would.

5. Location is a lending variable

Lenders lean into proven leisure demand – think coasts, national parks, historic cities and event hubs. Some areas simply won’t qualify for holiday let lending if tourism fundamentals are weak. Due diligence is non-negotiable.

When holiday let is the better fit when compared to buy-to-let mortgages

• You want personal use flexibility without breaching tenancy rules.

• Your property is in a tourism-led location with strong seasonal income.

• You can evidence projected revenue via reputable agencies to support affordability.

Listen and connect

Catch the full conversation with Beth Taylor from HHH Mortgages on the Host Planet Mortgage Podcast. Watch on YouTube or listen on our website, Spotify, or Apple.

Need a holiday let mortgage? Click here to get in touch with Beth and the team at HHH Mortgages.

This article is for education only and isn’t financial advice. Always seek regulated advice for your circumstances.