Holiday let mortgage calculator
Estimate the deposit and monthly repayment on a holiday let or serviced accommodation property. Capital and interest, or interest only.
Your estimate
Illustrative only. Not a quote or an offer of finance.
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How the holiday let mortgage calculator works
The calculator takes the purchase price and your loan to value to work out the loan and the deposit. On capital and interest it then applies the standard amortising repayment formula, so the loan is fully repaid over the term. On interest only it charges interest on the full loan each month and leaves the loan outstanding at the end, to be cleared by sale or refinance.
The capital and interest monthly payment is the loan multiplied by the monthly rate, divided by one minus one plus the monthly rate to the power of minus the number of months. The monthly rate is the annual rate divided by twelve. Interest only is simply the loan multiplied by the annual rate, divided by twelve.
What drives a real rate on a holiday let mortgage
A lender prices a holiday let mortgage on the projected short-let income behind it, built from the nightly rate and the occupancy you can realistically achieve, alongside any track record on the property or in the area. Loan to value, typically 65 to 75 percent, the quality of the property and its location all feed into the rate, with term loans indicatively from around 6 percent. Rates move with the wider market, so we quote them deal by deal. Use the calculator to model the deposit and the monthly cost, then send us the deal for a real view on terms.
Worked example
On a 450,000 pound holiday let at 70 percent loan to value, the loan is 315,000 pounds and the deposit is 135,000 pounds. At 7.5 percent over 20 years on capital and interest, the monthly payment is roughly 2,540 pounds. On interest only at the same rate the monthly cost falls to about 1,970 pounds, with the 315,000 pound loan still outstanding at the end.
Holiday let mortgage calculator: common questions
How accurate is this holiday let mortgage calculator?
It gives a realistic illustration of the monthly repayment on a holiday let mortgage from the price, loan to value, rate and term you enter. Real rates on a serviced accommodation or holiday let property depend on the strength of the projected short-let income, the loan to value and the lender, with term rates indicatively from around 6 percent, so treat the result as a guide rather than a quote.
What loan to value can I get on a holiday let?
Lenders typically advance 65 to 75 percent of the valuation on a holiday let or serviced accommodation property, so the deposit is usually 25 to 35 percent of the price. Strong projected short-let income, a track record and a good location support the higher end of the range. Set the loan to value in the calculator to model your own deposit.
Should I choose capital and interest or interest only?
Capital and interest repays the loan over the term, so the balance reaches zero and the monthly cost is higher. Interest only keeps the monthly cost down but leaves the full loan outstanding at the end, to be repaid by sale or refinance. Investors holding a holiday let for the long term sometimes amortise, while those planning a refinance or sale often prefer interest only. Toggle between them above to compare.
Want a real holiday let mortgage quote?
Send us the property and the projected short-let income and we will come back with a view on fundability and likely terms within one working day.