Holiday Let Mortgage Calculator (UK)
Use this calculator to estimate loan size, affordability, and lender stress-test outcomes for a furnished holiday let mortgage.
This is an educational estimate only. Lenders also assess personal income, existing debts, property type, seasonality, and trading history.
How to use this holiday let mortgage calculator
A holiday let mortgage is assessed differently from a normal residential mortgage. Instead of relying only on your salary, lenders usually test expected rental income against a stress interest rate and an ICR (Interest Coverage Ratio) target. This calculator brings those pieces together so you can quickly see whether your scenario looks workable.
- Enter the property value and your deposit percentage to calculate the requested loan.
- Add your expected monthly rent from short-term guests.
- Set lender-style stress inputs (ICR and stress rate) to estimate affordability.
- Compare repayment and interest-only monthly costs.
How lenders typically assess holiday let borrowing
1) Loan-to-value (LTV) limit
Most holiday let products have a cap on LTV. For example, if a lender allows up to 75% LTV, then your loan cannot exceed 75% of the property value, regardless of rental income.
2) Interest Coverage Ratio (ICR)
Lenders often require projected rental income to cover stressed mortgage interest by a margin (for example, 125% to 170%). A higher ICR requirement means you may need more rent or a lower loan to pass the test.
3) Stress test rate
Instead of using your actual deal rate, lenders frequently apply a higher stress rate. This helps ensure the loan still looks affordable if rates rise. Your maximum borrowing can drop significantly when the stress rate increases.
What each input means
Property value and deposit
These two numbers define your requested loan amount. A larger deposit lowers LTV and usually improves affordability.
Interest rate and term
These are used to estimate your monthly payment. The calculator shows both:
- Repayment: includes principal + interest, so balance reduces over time.
- Interest-only: lower monthly payments, but principal remains outstanding.
Rent, ICR, and stress rate
These drive the rental affordability check. Even if your payment seems manageable, failing rental stress tests can still limit the loan available.
Improving your holiday let mortgage position
- Increase deposit size to reduce LTV.
- Target stronger year-round occupancy and realistic pricing.
- Choose locations with stable demand beyond peak season.
- Provide credible rental forecasts and evidence from comparable listings.
- Maintain healthy personal credit and manageable existing debt.
Frequently asked questions
Does this include fees and stamp duty?
No. This tool focuses on mortgage affordability mechanics. You should separately budget for stamp duty, legal fees, valuation, broker costs, and furnishing.
Can I rely on this result for a mortgage offer?
No calculator can guarantee approval. Each lender has unique criteria around minimum income, age at term end, property suitability, and whether first-time landlords are accepted.
Is holiday let income treated the same as buy-to-let?
Not always. Holiday let underwriting can differ from standard buy-to-let due to seasonality, occupancy assumptions, and operational costs.
Final note
Use this calculator as an early planning tool before speaking with a mortgage broker. It helps you test scenarios quickly, compare risk levels, and set realistic expectations for your next holiday let investment.