Holiday-let mortgages

Purpose:

Holiday-let mortgages are specifically designed for people who want to purchase a property that they will rent out as a holiday home. They are not intended for properties that will be rented out on a long-term basis.

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Lending criteria:

Lenders will typically have specific lending criteria for holiday-let mortgages. For example, they may require that the property is located in a popular holiday destination, that it has a good rental history, or that it is fully furnished.

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Loan-to-value (LTV) ratio:

The maximum LTV ratio for a holiday-let mortgage may be lower than for a buy-to-let mortgage. This means that investors may need to provide a larger deposit to secure financing.

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Interest rates:

Interest rates for holiday-let mortgages may be higher than for buy-to-let mortgages. This is because holiday-let properties may be considered higher risk, as they are often located in areas that are reliant on tourism.

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Tax implications:

Holiday-let mortgages may have different tax implications compared to buy-to-let mortgages. For example, rental income from holiday-let properties is typically subject to income tax, but there may be some tax breaks available for expenses such as maintenance and repairs.