Holiday Let Mortgages

Holiday let mortgages with Swansea Building Society can help you achieve your wish of owning an investment property for short term lettings

Holiday Let Mortgages
Holiday Let Mortgages

Are you considering purchasing a second property to let on a short term basis strictly from an investment standpoint?

With staycations on the increase and economic uncertainty rendering conventional buy-to-let properties a less attractive choice, short-term holiday lets can be an ideal way to earn a steady return on property investment.

The great news is holiday let mortgages with Swansea Building Society can help you achieve your wish and improve your income. So, let's take a look at everything you need to know about holiday let mortgages.

What Is a Holiday Let Mortgage?

Holiday let mortgages are tailored for properties that will be let out on a non-permanent basis as holiday accommodation

It differs from a holiday home mortgage, which is when you take out a loan to purchase a holiday home that only you will use.

What’s The Difference Between Buy-To-Let and Holiday Let?

Buy-to-let property has always been a desirable property investment choice and is when you borrow cash to purchase a property which is going to be let-out on a long-term basis.

However, holiday lets are now proving to be an alluring alternative.

One of the advantages of a holiday let, is that generally, you can charge higher rates for short term lets compared to standard rental property. Consequently, assuming that you can let it out on a regular basis, you could yield a much larger income.

The taxman views furnished holiday lets differently. They're classified as a business, so this means it's possible to still claim tax relief on the mortgage interest. Compared, to buy-to-let properties where that relief is being reduced.

For a property to be considered as a holiday let, instead of a buy-to-let, it needs to be available for rent as furnished holiday property for a minimum of 210 days per year.

Why Do Holiday-Lets Necessitate a Specialist Mortgage?

Standard residential mortgages don't allow you to let out your home, while buy-to-Let mortgages are more suited to prolonged rentals.

To determine your affordability on a Buy-to-Let mortgage, a yearly rental sum is applied based on a presumed 6–12-month tenancy. Which means that those wishing to purchase a holiday rental, won’t satisfy the requirements for a Buy-to-Let mortgage.

Holiday-Let affordability, conversely, is calculated based on short-term letting throughout the principal holiday seasons.

What Are the Tax Advantages of a Holiday Let Mortgage?

The huge appeal of a holiday let mortgage is how the taxman perceives it. Since a furnished holiday let is considered a business, you can deduct all your expenses from your letting income before you are assessed for tax. This also includes the interest you pay on your mortgage.

In comparison, tax relief on buy-to-let mortgages is becoming less generous for higher-rate taxpayers.

Mortgage Interest Rates

(click on the mortgage product name for more information)

Purchase / Remortgage


Maximum Loan to Value of Property (LTV)

Variable Interest Rate

The overall cost for comparison is*

APRC based on a loan value of:

Holiday Let 60
0.55% over SBS Variable Base Rate (currently 6.00%) with a minimum SBS Base Rate of 3.00% 60% 6.55% 6.70% APRC £250,000
Holiday Let 75
0.95% over SBS Variable Base Rate (currently 6.00%) with a minimum SBS Base Rate of 3.00% 75% 6.95% 7.10% APRC £300,000
Limited Company
Holiday Let  Mortgage
0.95% over SBS Variable Base Rate (currently 6.00%) with a minimum SBS Base Rate of 3.00% 75% 6.95% 7.20% APRC £155,000


Local Mortgage Manager

Please contact your local mortgage manager today for more information.

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