Holiday let
No fuss, common-sense approach to lending.
Criteria for buying a holiday rental
Principality are one of the few lenders who consider holiday let applications across England and Wales.
If your client is looking to buy a property to use as a holiday home, there are a few things that need to be considered. Your client:
should be 21 years old or older
should have no more than 2 mortgaged holiday lets, whether in sole or joint names, including the current application.
can be a first time buyer or landlord
What you need to know
We offer a range of holiday let products for purchases and re-mortgages, whether your client is looking to purchase their first property to let or expanding their current portfolio. Please note: applicants can stay in the property for up to 2 months per annum.
- there is no minimum income requirement
- we consider Non-EEA applicants
- we consider non-regulated holiday mortgage applications on an advised basis
- we accept applications from applicants who do not currently own and live in their own home
- the maximum LTV for a holiday let mortgage is 75%
- the minimum property value and purchase price is £50,000
- the minimum loan size is £25,000
What are the loan to value limits?
| Loan to value | Minimum loan size | Maximum loan size |
|---|---|---|
| 60% | £25,000 | £1,000,000 |
| 75% | £25,000 | £750,000 |
How is affordability calculated?
For different lending scenarios, we will require as rental coverage:
• If the application is a £4£ re-mortgage on a property purchased on a Holiday Let basis before January 2017, we will require 125% @ 7.70% as rental coverage.
• If the application is a £4£ re-mortgage on a property purchased on a Holiday Let basis after January 2017, we will require 145% @ 7.70% as rental coverage.
We will apply a stress rate of the product interest rate + 2%.
For example:
• £1500 rental income
• Based on a 2-year discount rate product with an interest rate of 7%
• Stress rate: 9%
• Maximum borrowing: £137,931
For more details visit our mortgage lending criteria.
We will apply a stress rate based on the product interest rate selected.
For example:
• £1500 rental income
• Based on a 5-year fixed rate product with an interest rate of 6%
• Stress rate: 6%
• Maximum borrowing: £206,896
For more details visit our mortgage lending criteria.
View our Holiday Let mortgages
Want to find out more, view our Holiday Let range.