Airbnb Mortgages

The criteria for an Airbnb mortgage will vary from one lender to another, with some taking more stringent lines on certain factors than others. It may depend on whether you are dealing with one of the mainstream lenders – who tend to cater to the only most straightforward clients with no complications – or one of the smaller providers or specialist lenders who are filling the gaps in the market, but there are a few commonalities.

If you are going for a Holiday Let type of mortgage, then lenders will want to check your anticipated rental income for the whole of a calendar year in order to allow for seasonal fluctuations between popular months (when rents will be much higher and more lucrative) and quieter times (when you may struggle to have any income at all). The evidence for this will obviously depend on the location of the property and any track record of established short-stay rental patterns in the area. If you are applying for a Buy-to-Let style loan, then lenders will assess your ability to service your new mortgage based on the income your property could achieve on a standard rental, which may be less.

Lenders will also look at the type and size of the property. Conventional houses, apartments, cottages, etc, will not cause any problem, but any property that may be more difficult to sell in future or pose a particular risk of damage, such as a listed property or non-standard construction properties (like static caravans), as well as properties that are below 25–30 square metres in size, are likely to be turned down.

In terms of a deposit, the expectations are usually the same as for Holiday Lets or Buy-to-Let properties. Lenders would require you to provide a deposit of at least 20%–25% of the purchase price, or in the case of a remortgage the equivalent amount of equity. As is always the case, the higher the level of deposit you can supply, the more likely your application is to be accepted and the more favourable the deal or interest rate could be. Having the security of a sizable deposit encourages lenders to be more flexible on other points.

Although the property will be the focus of your business and usually the primary source of income to fund the mortgage, lenders will also likely assess your personal income as well as your credit history and profile, to make sure that you will be able to cover the mortgage repayments over the course of the year, in case of quiet periods.

Trying to secure the right Airbnb mortgage isn’t always straightforward, and a lot will depend on the type of property, its location and the circumstances around your financing of the mortgage in the long run. Your best bet is to speak to one of our expert mortgage advisers, who will be able to help you find the right mortgage for your needs.

While everyone is keen to ensure their mortgage is on the most favourable possible rate, it would be impossible for us to list the ‘best’ rates here. The mortgages market is highly dynamic, with rates frequently shifting, new products being introduced and other deals being removed almost on a daily basis.

It’s also the case that the most suitable mortgage interest rate available to you for an Airbnb property will largely depend on your own individual circumstances. Lenders will offer the most suitable on short-stay properties to those who have:

• Larger deposits
• Higher, consistent personal income
• A good credit history and profile

To be even more certain of obtaining the most favourable deal, your mortgage application should be further backed up with previous experience as a landlord, showing that you understand about the costs and duties involved with letting out a property, and therefore present a lesser risk than someone new to the business.

Mortgage rates for Airbnb and other Holiday Let properties are likely to be a little higher than for the average residential mortgage, but our team of specialist advisers have access to some of the most reasonable and reliable Airbnb mortgage lenders on the market. With decades of experience in sourcing just the right mortgages on all sorts of properties, for a wide variety of borrowers, they are well-placed to secure the right Airbnb mortgage rate for you.

The only way to find out the most suitable interest rate for your Airbnb property mortgage is to talk over all the details of your property and finances. Call and speak to one of our advisers today to find out more.

With the dramatic rise in the popularity of Airbnb in recent years, an increasing number of lenders are becoming more flexible when it comes to granting a mortgage on these types of short-term lettings. There may be a perception of an increased risk with no agent involved and less personal contact between the ‘host’ and the temporary tenant. But with the increase in using digital technology to organise our lives – from shopping to parking, ordering food, keeping fit and even managing our finances – this concern is on the wane, especially as the digital arena often facilitates greater accountability (through reviews, feedback, data tracking, etc).

You might find that a few high street lenders are moving slowly towards recognising the need to understand this type of lending, with the introduction of variants on a Holiday Let-style mortgage product. However, they are not always keeping up with the times, and their more conventional perspective and lending criteria might lead them to view the property as unsuitable for lending on, or they may not be willing to consider lending where the source of income or finance for the mortgage might be unreliable or inconsistent.

You are more likely to find the mortgage you need through one of the specialist Buy-to-Let lenders, who tend to be more flexible in their approach to borrowers and new methods of property management. They’ll take a far broader view in their assessment of your finances and the circumstances around the property, understanding about seasonal fluctuations and ways of anticipating income.

These specialist lenders rarely advertise to the public and prefer to accept mortgage applications only through a trusted third party like our team at Just Mortgage Brokers. As experienced brokers with established relationships with lenders across the board, we are able to access deals that you will not find available on the high street and are confident that we can find exactly the right mortgage to meet your needs and plans for your Airbnb property.

There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.

Your property may be repossessed if you do not keep up repayments on your mortgage.