Thinking of buying a second home in North Wales? Learn how to navigate holiday let mortgages and turn your property investment into a profitable venture
With the surge in staycations and the steady demand for unique, well-located holiday properties, more people are seeing the value in investing in a holiday let. Whether you’re a first-time buyer or looking to expand your portfolio, understanding how holiday let mortgages work, the criteria lenders look for, and what financial commitments are involved can help you make informed choices.
In this guide, we’ll break down everything you need to know about securing a mortgage for a holiday let, so you can confidently embark on your property journey in North Wales and beyond…
How Do Holiday Let Mortgages Work in Wales?
Holiday let mortgages are designed for properties rented to holidaymakers on a short-term basis. Unlike standard mortgages, they account for the seasonal income and fluctuating occupancy typical of holiday rentals
Do You Need a Holiday Let Mortgage for Your Property?
If you plan to let out your property as a holiday home for most of the year, you will need a holiday let mortgage. Standard residential mortgages typically do not allow for short-term letting, and using one for this purpose could be considered a breach of your mortgage terms.
You’ll need a holiday let mortgage if:
- The property is rented out to different guests on a short-term basis.
- You plan to let the property for at least 182 days per year (to meet Furnished Holiday Let criteria).
- You aim to benefit from tax advantages available to holiday lets.
Lenders will assess your application based on:
- Your income, including projected rental income.
- The property’s location and desirability as a holiday destination.
- Your financial history and deposit amount (usually 25-30% of the property’s value).
Don’t forget when buying an additional property you’ll need to consider the land transaction tax (stamp duty) & additional premiums. These will need to be considered in your financial calculations. For more information on this, head to our Complete Guide to Second Home Stamp Duty in Wales.
Top Tip: Always check with your lender or a mortgage advisor to ensure you have the correct type of mortgage for your intended use.

Holiday Let Mortgage Calculator
A holiday let mortgage calculator can help you estimate:
- How much you can borrow.
- Monthly repayment costs.
- Potential rental yield required to cover repayments.
Input details like the property price, your deposit, and projected rental income to get an idea of affordability.
Holiday Let Mortgage Calculator examples:
Holiday Let Mortgage Calculator by Holiday Let Mortgages
Holiday Let Mortgage Calculator by Commercial Trust
Holiday Let Mortgage Calculator by Monmouthshire Building Society
Difference between Holiday Let Mortgages and Buy-to-Let Mortgages
It is important to explain that a holiday let mortgage is not the same as a mortgage used for a buy to let property. Holiday let mortgages and buy-to-let mortgages serve different purposes and have distinct features.
- Rental Terms: Holiday let mortgages are for short-term lets with multiple guests, while buy-to-let mortgages cater to long-term rentals.
- Income Assessment: Holiday let lenders consider seasonal rental income; buy-to-let lenders focus on fixed tenancy agreements.
- Tax Benefits: Holiday lets offer advantages like capital allowances and mortgage interest relief, whereas buy-to-let properties have fewer tax perks.
- Deposit Requirements: Holiday let mortgages often require a higher deposit (25-30%) compared to buy-to-let mortgages (20-25%).
Top Tip: Choose the mortgage that best matches your property’s rental purpose. If you’re unsure, consult a specialist broker for advice.
Holiday Let Mortgage Rates and Providers
Holiday let mortgage rates are typically higher than standard residential mortgage rates due to the perceived risk associated with short-term rentals. However, rates can vary significantly between lenders, so it’s important to shop around.
Rates typically range from 4-6%, depending on:
- Loan-to-value (LTV) ratio.
- Lender policies.
- Your creditworthiness.
Deposit requirements vary from lender to lender, and range from 25-40%. You will also need to provide evidence of your income and the potential income from the property to demonstrate affordability.
At Menai Holiday Cottages, we can help provide a mortgage letter outlining how many days we believe the property could be let out for and how much income this can achieve. Contact us today to find out more about this.
Where Can I Find a Holiday Let Mortgage?
- Specialist Lenders: Companies like Holiday Let Mortgages specialise in this type of loan.
- High Street Banks: Some traditional lenders offer holiday let mortgages but may have stricter criteria.
- Mortgage Brokers: Professionals like UKI Financial Planning Ltd or can help you navigate the market.
Top Tip: Given the limited number of lenders offering holiday let mortgages, using a mortgage broker can be more efficient. Brokers can find the best deals, access exclusive offers, and handle most of the paperwork for you. Consider a broker who specialises in holiday let mortgages to navigate the process smoothly.

Is there a Tax Benefit to a Specialist Mortgage?
Yes, there are potential tax benefits to having a holiday let mortgage. If your property qualifies as a Furnished Holiday Let (FHL), you may be eligible for several tax advantages, including:
- Capital allowances on furniture and fittings.
- Mortgage interest relief, which is not available for standard buy-to-let properties.
- Capital Gains Tax reliefs when selling the property.
Top Tip: Ensure your property meets the criteria for an FHL to take full advantage of these tax benefits. Consult with a tax advisor to understand how these benefits apply to your specific situation.
For more information, visit Gov.uk and consult a tax advisor to ensure you’re making the most of these benefits.
How to Qualify as a Furnished Holiday Let in Wales
As of January 2025, the criteria for a property in Wales to qualify as a Furnished Holiday Let (FHL) are as follows:
- Availability: The property must be available for letting to the public for at least 252 days in the year.
- Letting: The property must be let to the public for at least 182 days in the year.
In addition to meeting these thresholds, the Valuation Office Agency (VOA) will determine the rateable value of your property. This assessment is based on factors such as:
- Property type
- Size
- Location
- Quality
- Projected income
IMPORTNANT: Upcoming Changes to Note
The Welsh Government is introducing a statutory registration and licensing scheme for all visitor accommodation providers, expected to take effect in 2025. This scheme aims to ensure safety and quality compliance across the sector. Stay informed about these upcoming changes, as registration will soon be mandatory for all holiday let properties in Wales.
For a deeper understanding of FHL taxation and the specific benefits available, head to our Guide to Furnished Holiday Let Tax and Business Rates in Wales.

What are the Next Steps?
Ready to take the plunge? Here’s how to get started:
- Assess Your Budget: Use a holiday let mortgage calculator to determine your affordability.
- Research Locations: North Wales is a prime destination, but focus on areas with high rental demand.
- Find a Lender or Broker: Reach out to trusted lenders or brokers for tailored advice.
- Prepare Your Application: Gather proof of income, deposit funds, and a solid business plan for your holiday let.
- Secure the Property: Work with local estate agents familiar with holiday lets.
- Consider letting with a holiday let agent: Menai Holidays can help you stay ahead of the game and maximise your bookings. Our 5 Things to Consider When Choosing a Holiday Letting Agency blog outlines some of the things you need to consider when choosing the right agent for you.
Top Tip: Keep an emergency fund for unexpected costs, such as repairs or periods of low occupancy.
Why Choose Us?
With decades of experience in the North Wales holiday let market, we understand the unique challenges and opportunities in this region. Partnering with Menai Holiday Cottages ensures your investment is in safe hands and that your up to date with rules and regulations for holiday lets in Wales.
Final Thoughts on Holiday Let Mortgages
Securing a holiday let mortgage might seem complex, but with the right preparation and expert advice, it can be a straightforward process. By understanding your financial position, exploring available options, and leveraging tax benefits, you can turn your dream of owning a holiday let in North Wales into a reality.
Ready to start your journey toward owning a holiday let in North Wales? Contact our experts today to get personalised advice and ensure your investment is a success. Let us help you navigate the process with confidence!
Note: The information contained in this article was accurate at the time of writing, based on our research. Rules, criteria and regulations change all the time, so please contact our prospective new owner team if you’d like to hear how. Nothing in this article constitutes the giving of financial, tax or legal advice to you; please consult your own professional advisor (accountant, lawyer etc). in this regard. If we have referred within the article to a third-party provider of unregulated holiday let mortgages, this is due to the fact that such mortgages aren’t currently regulated by the FCA.As a helpful reminder, your home may be repossessed if you do not keep up repayments on a mortgage, so again anything you decide to do in this particular area this is one on which you should take your own professional advice on too, as we aren’t providing and can’t provide you with this.
As a holiday letting owner you are responsible for compliance with health & safety laws, regulations and guidance, and for having suitable insurances in place (not Sykes Holiday Cottages or its brands). From time to time, Sykes shares information with you on the topic of health and safety and insurance. When it does so, it is not providing you with advice (legal, financial, tax or otherwise); please seek your own as you see fit. In addition, it is not making any representations or warranties about the information being complete or free from errors or inaccuracies. Sykes shall not be liable for any loss or damage arising under or in connection with your reliance on it.