## Can a Limited Company Get a Holiday Let Mortgage?
Yes, a limited company can get a holiday let mortgage in the UK, and this route is becoming increasingly popular among landlords and property investors. A holiday let mortgage allows a company to purchase or remortgage a property intended for short-term rentals, such as Airbnb or seasonal holiday accommodation. With rising demand for staycations and tax advantages associated with limited company structures, many landlords are exploring this investment strategy.
This form of buy-to-let lending offers flexibility, potential tax efficiency, and growing lender support. As 2025 approaches, lenders are adapting their criteria and interest rates to reflect the evolving holiday let market. Whether you’re a first-time investor or a seasoned portfolio landlord, understanding the nuances of holiday let mortgages through a limited company is essential for making informed decisions.
(Read our guide to limited company buy-to-let for more insights.)
## Quick Facts: Holiday Let Mortgages for Limited Companies
– **Typical Interest Rates (2025):** 5.5% – 7.0% (fixed and variable options)
– **Minimum Deposit:** Usually 25% (some lenders may require 30%)
– **Rental Coverage Ratio:** Typically 125% – 145% of stressed interest rate
– **Maximum Loan-to-Value (LTV):** Up to 75%
– **Arrangement Fees:** 1% – 2% of the loan amount
– **Application Timeline:** 4 to 8 weeks from application to completion
These figures are indicative and subject to change. Always seek tailored advice from a mortgage adviser.
## Mortgage Overview
A holiday let mortgage for a limited company is a specialist type of investment property finance. It enables a company—usually a Special Purpose Vehicle (SPV)—to purchase or refinance a property intended for short-term letting. Unlike standard buy-to-let mortgages, holiday let mortgages consider projected short-term rental income rather than long-term tenancy agreements.
These mortgages come in various product types:
– **Fixed-rate mortgages:** Provide payment certainty, popular in volatile rate environments.
– **Variable-rate mortgages:** May offer lower initial rates but come with potential fluctuations.
– **Tracker mortgages:** Linked to the Bank of England base rate, offering transparency but less predictability.
This mortgage type suits:
– **First-time landlords** entering the holiday let market
– **Portfolio landlords** expanding into short-term lets
– **Limited companies** seeking tax-efficient property ownership
Lender appetite has grown in 2024 and into 2025, with more providers offering holiday let products to limited companies. However, criteria remain stricter than for standard residential mortgages due to the perceived higher risk and income variability.
## Eligibility & Criteria
Obtaining a holiday let mortgage through a limited company involves meeting specific eligibility criteria. Lenders assess both the company and the individuals behind it.
### Income Requirements
While the mortgage is in the company’s name, directors and shareholders are still assessed. Some lenders require a minimum personal income (e.g., £25,000+), while others focus solely on rental income projections.
### Rental Coverage & Stress Testing
Rental income is assessed based on projected holiday let earnings, often supported by a letting agent or Airbnb income forecast. Lenders apply a stress test, typically requiring rental income to cover 125% – 145% of the mortgage payments at a stressed rate (e.g., 5.5% – 6.5%).
### Property Type Restrictions
Not all properties qualify. Preferred features include:
– Located in established holiday destinations
– Year-round letting potential
– No restrictive covenants (e.g., occupancy limits)
– Freehold or long leasehold tenure
Flats above commercial premises or properties with non-standard construction may be excluded.
### Credit Score Expectations
While the mortgage is in the company’s name, directors’ credit histories are scrutinised. A clean credit file with no recent defaults or CCJs is typically required.
### Age Limits & Employment Status
Most lenders require directors to be aged 21–75. Employment status is considered, particularly for new companies with limited trading history.
### Portfolio Landlord Criteria
If you own four or more mortgaged properties, you’re classed as a portfolio landlord. Lenders may request:
– A full portfolio schedule
– Business plans and cash flow forecasts
– Evidence of experience managing multiple properties
(Read our guide to portfolio landlord mortgages for more details.)
### Limited Company vs Personal Name
Holiday let mortgages are available to individuals and limited companies. However, limited companies may benefit from:
– Corporation tax on profits (currently 25% in 2025)
– Full mortgage interest relief
– Easier inheritance tax planning
### Right-to-Rent & Licensing
Holiday lets are exempt from Right-to-Rent checks but may require local authority licensing or registration, especially in tourist hotspots. Always check local regulations before applying.
## Costs & Affordability
Understanding the full cost of a holiday let mortgage is crucial for affordability and profitability.
### Common Fees
– **Arrangement fees:** 1% – 2% of the loan
– **Valuation fees:** £300 – £1,000+ depending on property value
– **Legal fees:** £1,000 – £2,000 (higher for limited companies)
– **Broker fees:** Often 0.5% – 1% of the loan
### Interest Rates
As of 2025, fixed rates for limited company holiday let mortgages range from 5.5% to 7.0%, depending on LTV, property type, and borrower profile. Variable and tracker rates may start lower but carry more risk.
(Explore current BTL mortgage rates in our comparison guide.)
### Rental Income Calculations
Lenders use projected gross rental income, adjusted for occupancy rates (typically 30–40 weeks per year). They may also factor in management costs if using a letting agent.
### Tax Implications
Limited companies benefit from full mortgage interest deductibility, unlike personal landlords affected by Section 24. However, profits are subject to corporation tax, and extracting income may trigger personal tax liabilities.
(Learn more about Section 24 and limited company taxation.)
### Insurance Requirements
You’ll need:
– **Buildings insurance**
– **Landlord insurance** covering holiday let use
– **Public liability insurance**
Some lenders require evidence of cover before completion.
### Stress Testing
Affordability is assessed at higher stress rates (e.g., 6.5%) to ensure the mortgage remains affordable if interest rates rise.
## Application Process
Applying for a holiday let mortgage through a limited company involves several steps:
### Step-by-Step Guide
1. **Initial research:** Compare lenders, rates, and criteria.
2. **Speak to a broker:** Especially important for limited company applications.
3. **Gather documents:** Company accounts, director ID, rental projections, bank statements.
4. **Submit application:** Through broker or directly to lender.
5. **Valuation and survey:** Lender will assess property value and suitability.
6. **Underwriting and offer:** Lender reviews documents and issues a mortgage offer.
7. **Legal work:** Solicitor handles conveyancing and company checks.
8. **Completion:** Funds are released and property ownership transfers.
### Required Documentation
– SPV company registration and SIC code (68100 or similar)
– Director ID and proof of address
– Business bank statements
– Projected rental income (from letting agent or Airbnb data)
– Property details and EPC certificate
### Timeline
Most applications complete within 4–8 weeks, though complex cases may take longer.
### Broker vs Direct
Using a mortgage broker can:
– Access specialist lenders not available to the public
– Navigate complex criteria
– Save time and reduce risk of rejection
### Common Pitfalls
– Inadequate rental projections
– Poor credit history of directors
– Unsuitable property type
– Incomplete documentation
## Benefits, Risks & Alternatives
### Benefits
– **Tax efficiency** via corporation tax and mortgage interest relief
– **Higher yields** from short-term lets
– **Growing demand** for UK staycations
– **Limited liability** protection for directors
### Risks
– **Void periods** and seasonal fluctuations
– **Interest rate volatility**
– **Regulatory changes** (e.g., licensing, planning restrictions)
– **Higher upfront costs** and stricter criteria
### Alternatives
– **Bridging loans:** For short-term purchases or renovations
– **Commercial mortgages:** For mixed-use or large-scale properties
– **Development finance:** For converting properties to holiday lets
### Remortgage vs Product Transfer
If you already own a property, consider whether to:
– **Remortgage** to a new lender (may unlock better rates)
– **Product transfer** with the same lender (quicker, fewer checks)
(Explore our BTL remortgage guide for more options.)
## FAQs
### What deposit do I need for a limited company holiday let mortgage?
Most lenders require a minimum deposit of 25% for a limited company holiday let mortgage. However, depending on the property type, location, and your company’s financials, some may ask for a 30% deposit. A higher deposit can improve your interest rate and affordability assessment.
### Can I get a holiday let mortgage through a limited company?
Yes, many UK lenders offer holiday let mortgages to limited companies, particularly SPVs set up for property investment. You’ll need to meet specific criteria, including projected rental income, credit checks on directors, and appropriate company structure. Using a mortgage broker can help identify the right lender.
### What rental coverage do lenders require?
Lenders typically require the projected rental income to cover 125% to 145% of the mortgage payments, calculated at a stressed interest rate (often 5.5% – 6.5%). This ensures the mortgage remains affordable even during rate increases or void periods. Accurate rental projections are essential.
### How does Section 24 tax affect buy-to-let mortgages?
Section 24 restricts personal landlords from deducting mortgage interest from rental income when calculating income tax. However,