Securing a mortgage on a property that will be let out via Airbnb is not always straightforward as lenders perceive this as a different risk than the traditional Buy to Let model. Even with the perceived risk, there are now a number of lenders that are willing to look at lending on this basis.
In recent years Airbnb has become very popular. An increasing level of people are using the service to source properties that are available for holidays, short breaks and short-term accommodation for varying purposes.
With this increase in popularity it is no surprise that the number of landlords that are offering this service are also increasing. While the turnover of ‘tenants’ is naturally higher than the traditional Buy to Let model, the increase in rental revenue can make it very worthwhile.
Can I get a mortgage for an Airbnb property?
Getting a mortgage for an Airbnb property in the UK is possible. While this may seem like a simple question, in reality the answer isn’t as simple. Different lenders have different criteria that need to be considered. So, in the first instance it is important to understand your investment strategy. While some Airbnb ‘hosts’ may let the whole property, others may only let part of the property while they are still living in it. It is also important to understand how many days in a calendar year the property will be available for letting. These are just some of the factors that need consideration before approaching a lender for an Airbnb mortgage.
Speak to one of our advisers today to see how they may be able to help you find a mortgage for your Airbnb property.
Do you need a buy to let mortgage on an Airbnb property?
It is not always necessary to get a Buy to Let mortgage on an Airbnb property. The type of mortgage you need will mostly depend on your Airbnb letting strategy.
For example, if you are looking to only rent a room out in a property that you live in, and this is for a limited number of weeks or months in a calendar year, then you may find that your current residential mortgage lender may already allow this. In these situations it is important to notify your current lender of your intention to let a room in your property prior to doing so. Otherwise you may find yourself in breach of your mortgage contract.
However, if you are looking to purchase a property or use an existing property solely for letting out then you will need to get a Buy to Let mortgage. Buy to Let mortgage lenders will also restrict the period of time per calendar year that you can let your property via Airbnb. While some lenders will allow type of letting for 3 months in a calendar year, there are others that will allow this type of letting for up to 6 months per calendar year.
Whatever your strategy, it is important to get the correct advice so you do not breach any of your mortgage contract terms and you can plan ahead by getting the correct type of mortgage.
Can I use a holiday let mortgage for an Airbnb property?
A Holiday Let mortgage is usually considered the most appropriate type of mortgage to use to acquire an Airbnb property. This is due to the fact that a Holiday Let property is also let out on a short-term basis.
What is the criteria for an Airbnb mortgage?
When lending on Airbnb properties, lenders criteria can vary. Lenders would expect you to have a deposit of at least 20% – 25% of the purchase price or in the case of a remortgage the equal amount of equity.
Unless you are going for a Holiday Let type of mortgage, lenders will also assess your ability to service the new mortgage based on the rental income your property could achieve on a standard rental NOT the amount of rent you could achieve on an Airbnb model. They will also look at the type and size of a property. Non-standard construction properties are likely to be turned down along with properties that are below 25 or 30 square metres in size.
Your personal income will also be assessed along with your credit history and profile. Trying to secure the right Airbnb mortgage isn’t always straightforward so speak to one our expert advisers to help you find the right mortgage for your needs.
mortgage rates for an Airbnb property
Securing the best rates for an Airbnb property will mainly depend on your individual circumstance.
Lenders will offer the best rates to those that have larger deposits along with good personal income and a good credit history and profile. This should be further backed up with previous experience as a landlord.
Our advisers have access to some of the best Airbnb mortgage lenders and are well placed to secure the right Airbnb mortgage rate for you. Call and speak to one of our advisers today to find out more.
mortgage lenders for an Airbnb mortgage
As Airbnb is getting more popular, there are some lenders that are moving towards being more flexible when it comes to these types of short-term lettings. While high street lenders are moving slowly towards recognising the need to understand this type of lending they are not always keeping up.
Some of the more flexible lenders are the specialist Buy to Let lenders that are usually available via specialist brokers like us.
Mortgage Advice for Airbnb properties
As with any type of mortgage advice, it is important that you get the correct advice to secure the right mortgage type and rate for your individual circumstance.
Airbnb mortgages are not always straightforward and it is important to understand the type of mortgage you are taking on. Breach of mortgage contract is something that you hear about in this area of mortgage lending. If a breach of mortgage contract occurs then a mortgage lender can recall the whole loan. This can not only be stressful but quite costly.
If you want to understand your Airbnb mortgage options then get in touch with us today and we will endeavour to give you the most appropriate mortgage advice for your Airbnb property.