Holiday Let Mortgage Rates 2026 — Updated August 2026
- Best rate (Keystone, 65% LTV, August 2026)
- 5.69%+Best rate (Keystone, 65% LTV, August 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
- August 2026Last updated
Holiday let mortgage rates in 2026 start from 5.69% from Keystone Property Finance at 65% LTV (August 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 — August 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 determines your rate
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
To qualify as an FHL (with associated tax advantages), the property must be available for commercial letting for at least 210 days per year and actually let for at least 105 days. Some lenders require FHL status; others simply assess the projected holiday rental income.
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.
Worked cost 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.
Rate context and outlook
Keystone Property Finance cut holiday let rates to 5.69% at 65% LTV in the week ending 7 August 2026 — among the sharpest holiday let rates available in the current market. The holiday let market has seen growing lender appetite as the sector has matured and data on income sustainability has improved. FHL tax rules changed from April 2025 (the FHL regime was reformed), which has had some impact on investor appetite — this should be confirmed with a tax adviser for any new holiday let purchase.
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 reformed from April 2025, removing certain 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.
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Independent whole-of-market advice · FCA No. 814533