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Holiday Let Mortgages

With summer approaching on the horizon, holiday let mortgages enquiries are on the increase. As the largest company in the holiday let market, it’s unsurprising that Airbnb is the most popular choice among both property buyers and holiday renters.

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How Can I Finance the Purchase of an Airbnb Mortgage?

For a long time, many conventional mortgage lenders would not consider financing the purchase of an Airbnb property. This was largely due to the legal complications surrounding such buy-to-let properties, as well as the seasonal fluctuations in income that these ventures involve and the elevated maintenance costs associated with the operation of this type of business.

Axis Bank are the first institution to have proposed a solution to the problem but stipulate that all applicants seeking to purchase an Airbnb property must already be in possession of at least three other buy-to-let assets. Furthermore, their products are only available in certain parts of the UK, meaning that plenty of buyers have been left with no recourse.

Fortunately, an established mortgage provider has recently indicated that they plan to launch a new product catering specifically to the ever-growing Airbnb market. This is exciting news for a number of reasons, given that there are no minimum income requirements, the provider adopts a pragmatic stance when it comes to marginally chequered credit history and caters to both personal applicants and those belonging to a limited company.

Holiday Let Mortgages 80 ltv

The mortgages will be available with a loan-to-value (LTV) ratio of up to 75%, while interest rates start from just 2.99% (5.1% APR). All that is required to qualify for this attractive opportunity is that all applicants must already own at least one other buy-to-let property and that the property for which the loan application is being made can only be used for holiday let mortgages 80 ltv or Airbnb mortgage purposes.

However, buyers interested in the deal should be aware that the maximum amount available will be determined based upon an assessment of the rental income that the Airbnb property would garner if it was let on a conventional assured shorthold tenancy (AST). Since this normally attracts lower rental rates than a holiday let mortgages 80 ltv or Airbnb mortgage property, it’s likely that the total amount available to the borrower may be less than they might have expected.

However, it does offer the silver lining that if the property does not perform as well as predicted in the holiday let mortgages market (for whatever reason), the borrower has the option to fall back onto the AST market as a safety net. With one mortgage provider has opened up the market for Airbnb property buyers, it’s likely that many more will follow their example in the coming year.

If you’re interested in sourcing a mortgage provider for an Airbnb property in the near future, why not get in touch? We can walk you through all of the providers and products available to you, discussing your options in full and allowing you to make an informed decision.

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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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