Holiday Let Mortgage Rates 2026 — Updated October 2026
- Best rate (Keystone, 65% LTV, verified 1 Oct 2026)
- 5.69%+Best rate (Keystone, 65% LTV, verified 1 Oct 2026)
- Typical holiday let rate range
- 5.69%–7.5%Typical holiday let rate range
- Premium over standard BTL at same LTV
- +1%–2%Premium over standard BTL at same LTV
- Last updated
- October 2026Last updated
Holiday let mortgage rates in 2026 start from 5.69% from Keystone Property Finance at 65% LTV (verified 1 October 2026) — notably higher than equivalent standard BTL rates at the same LTV. The rate premium reflects the more variable nature of holiday rental income (seasonal, demand-dependent) compared to the stable rental income of an assured shorthold tenancy. This guide explains the rate landscape and how holiday let lenders assess income.
Holiday Let Mortgage Rates — October 2026
Swipe the table sideways to see every column.
| LTV | Rate range (2yr fix) | Rate range (5yr fix) | Notes |
|---|---|---|---|
| 55%–60% LTV | 5.50%–6.20% | 5.80%–6.50% | Best rates for lowest risk holiday let applications. |
| 65% LTV | 5.69%–6.50% | 6.00%–6.80% | Keystone from 5.69%. Most active holiday let lenders operate here. |
| 70%–75% LTV | 6.20%–7.50% | 6.50%–7.80% | Some lenders cap at 70% for holiday lets. Higher LTV = fewer options. |
| Urban / non-premium location | +0.3%–0.8% premium | — | Premium holiday let locations (Lake District, Cornwall, Edinburgh) get best rates. |
| Expat / non-resident investor | 6.0%–8.0% | — | Narrower lender pool for non-resident holiday let investors. |
What moves holiday let mortgage rates
Holiday letting income assessment
Holiday let lenders assess affordability on projected annual rental income from a specialist holiday letting valuation — not a standard RICS residential rental valuation. The projected income is typically higher than a standard AST rental in premium holiday locations (Lake District, Cornwall, Cotswolds, Edinburgh) but varies significantly with location and season.
Location quality
Premium holiday destinations (coastal, national park, heritage city) attract the widest lender pool and best rates. Urban or non-destination locations face fewer lenders and higher rates.
Furnished Holiday Letting (FHL) status
The FHL tax regime was abolished from April 2025, so holiday lets no longer sit in a separate tax category. Lenders have adapted their income assessment accordingly — short-term rental income is now assessed case by case, and the old FHL occupancy tests (available 210 days, let 105 days) survive only where an individual lender still uses them as a letting-viability benchmark. The rate landscape is unchanged, but income documentation requirements differ from pre-2025 guidance.
LTV
Holiday let lenders are generally more conservative on LTV than standard BTL — most cap at 70%–75%. A lower LTV deposit (30%–40%) is typically required versus 20%–25% for standard BTL.
Personal use
Lenders assess personal use of the property. Significant personal use reduces the commercial letting days, which affects both FHL status and the income available to cover the mortgage. Must not be the borrower's main residence.
What a holiday let mortgage costs: worked example
- Projected annual rental income
- £32,000 (specialist holiday letting valuation)
- Monthly interest
- £1,292/month
- Annual interest
- £15,500
- Rental income coverage
- £32,000 / £15,500 = 2.06x (strong coverage)
- After management fees (25% of gross)
- net rental income £24,000
- Net yield after mortgage interest
- £8,500 / £385,000 = 2.2%
Scenario: £250,000 holiday let mortgage on a £385,000 Lake District cottage (65% LTV). 5-year fix at 6.20%.
Capital growth in premium holiday locations has historically been strong — the combination of capital growth and holiday rental premium income is the primary investment case.
Rates rose in September — lock in today, review before completion
The figures above are indicative and describe the best case. Send your own scenario and we will come back the same working day with terms from the lenders that actually fit it.
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Rate context and outlook
The Bank of England held Bank Rate at 3.75% on 17 September 2026, its sixth consecutive hold, but three of nine MPC members voted to raise it to 4.0%. The Committee warned policy may have to tighten if the Middle East conflict persists.
Fixed rates are priced from swap rates, and the 2-year swap rose from 4.26% on 3 September to above 4.70% by mid-month, so most major lenders repriced fixed rates upward two or three times in September. The next decision is on 5 November. If your deal ends in the next six months, securing a rate now and reviewing it before completion is the lower-risk approach.
Reviewed by David Doulton, Director, Doulton Bridging Finance — over 20 years in property finance. Last reviewed 1 October 2026. Doulton Money Ltd t/a Doulton Bridging Finance, FCA No. 814533.
Frequently asked questions
What is a holiday let mortgage and how is it different from BTL?
A holiday let mortgage is specifically designed for short-term (holiday) rental properties — properties let through platforms like Airbnb, Sykes Cottages, or direct booking. Unlike standard BTL mortgages (which assess long-term AST rental income), holiday let mortgages assess projected short-term rental income from a specialist holiday letting agent valuation. Rates are higher because income is more variable.
Can I use a standard BTL mortgage for a holiday let?
Not legitimately — standard BTL mortgage terms typically prohibit short-term or holiday lettings. Using a standard BTL mortgage for holiday lettings is a breach of mortgage conditions and constitutes mortgage fraud. A specific holiday let mortgage product is required.
What deposit do I need for a holiday let mortgage?
Most holiday let mortgage lenders require a minimum deposit of 25%–30% (70%–75% LTV maximum). Some specialist lenders cap at 65% LTV, requiring a 35% deposit. This is higher than standard BTL (20%–25% deposit) reflecting the additional income risk.
Does the FHL tax change from April 2025 affect holiday let mortgages?
The Furnished Holiday Letting (FHL) tax regime was abolished from April 2025, removing the tax advantages that FHL properties previously enjoyed over standard BTL. This does not directly affect holiday let mortgage rates or eligibility, but may affect the after-tax return on holiday let investments. We recommend taking specific tax advice on the current FHL tax position before purchasing a holiday let.
Which lenders offer holiday let mortgages?
The specialist holiday let mortgage market includes Keystone Property Finance, Bath Building Society, Principality Building Society, and a number of other specialist and regional building societies. Mainstream banks (Halifax, Nationwide, HSBC) generally do not offer holiday let mortgages. As a whole-of-market broker, we access the full specialist holiday let lender panel.
How much can I borrow?
Usually 4 to 4.5 times income, with some lenders going to 5 or 5.5 times for higher earners and certain professions, subject to affordability.
How long does a mortgage take?
A mortgage in principle takes minutes to a day; a full offer usually takes 2–4 weeks from application.
Is a lower rate with a high fee better than a no-fee deal?
It depends on the loan size. On smaller loans the no-fee deal often wins; we compare the total cost over the fixed period.
How early can I remortgage?
You can secure a new deal up to six months before your current one ends.
What documents will I need?
ID, proof of address, 3 months' payslips and bank statements, or 2 years' accounts or tax calculations if self-employed.
Where this applies
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Most buy-to-let mortgages are not regulated by the FCA. Your property may be repossessed if you do not keep up repayments.
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Independent whole-of-market advice · FCA No. 814533