Mortgages for Airbnb properties Mortgages for Airbnb properties

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’re looking to only rent a room out in a property that you live in, for a limited number of weeks or months in a 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, prior to doing so. Otherwise you may find yourself in breach of your mortgage contract.

However, if you’re looking to use a property solely for letting out, then you’ll need to get a Buy-to-Let mortgage. Airbnb Buy-to-Let mortgage lenders will also restrict the period of time per calendar year that you can let your property via Airbnb. Some lenders will allow you to let the property out for 3 months out of the year, while others may allow 6.

Whatever your strategy, it is important to get the correct advice, so you do not breach any of your mortgage contract terms. Reach out today and one of our expert advisors will be happy to discuss your plans.

The criteria for an Airbnb mortgage will vary from one lender to another. The type of lender you use will also have a large influence on the criteria. Mainstream lenders tend to cater to only the most straightforward clients with no complications. Whereas, the smaller providers or “specialist lenders” are typically much more flexible with their criteria.

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. This is so they can consider and allow for seasonal fluctuations between popular months. The evidence they use will depend on the property location and any track record of short-stay rental patterns in the area.

So, what if you’re applying for a Buy-to-Let style loan? In this case, lenders will assess your ability to service your new mortgage based on the income your property could achieve on a standard rental. Remember this can and 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 or pose a risk of damage are likely to be turned down. Examples include a non-standard construction properties (like static caravans) or properties that are below 25-30 square metres in size.

One final thing lenders will likely assess is your personal income as well as your credit history and profile. This helps them ensure you will be able to cover the mortgage repayments over the course of the year, in case of quiet periods.

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. To add to this, it will also increase your chances of obtaining a  more favourable deal or interest rate. Having the security of a sizable deposit encourages lenders to be more flexible in their criteria.

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. Rates are frequently shifting, and products are being introduced and removed all the time.

It’s also the case that the most suitable mortgage interest rate available to you will largely depend on your own 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, showing previous experience as a landlord can be key. This demonstrates that you understand the costs and duties involved with letting out a property. Therefore, you present a lesser risk than someone new to the business.

Mortgage rates for Airbnb properties are likely to be a little higher than for the average residential mortgage. However, our team of specialist advisors have access to some of the most reasonable lenders on the market.

The only way to find out the most suitable interest rate is to talk over all the details of your property and finances. Why not reach out today and discuss your needs over a free no-obligation consultation.

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You might find that a few high street lenders are moving slowly towards recognising the need to understand this type of lending, due to 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. Furthermore, they may not be willing to consider lending where the source of income for the mortgage might be unreliable or inconsistent.

You are more likely to find the mortgage you need through a specialist Buy-to-Let lender. These lenders 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.

Many specialist lenders rarely advertise to the public and prefer to accept applications through a broker, like us. As experienced brokers with established relationships with lenders across the board. This means we can access deals that you will not find available on the high street.

If you want to discuss your options and see what lender will suit you best, reach out today!