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A buy to let mortgage is for a property let to a tenant on a standard tenancy agreement, usually six or twelve months at a time. A holiday let mortgage is for a property let to guests for short stays. They are different products, assessed in different ways, and using the wrong one is a breach of your mortgage conditions.
The confusion is understandable, because from the outside the two look similar. You put down a deposit, you borrow the rest, someone else pays to stay in the property. But the lender is being asked to rely on two very different kinds of income, and that changes how much you can borrow, which lenders will consider you, and what happens if you change how you use the property later.
How lenders assess the two
A buy to let lender looks at the monthly rent a tenant would pay on a standard tenancy. A letting agent confirms the likely figure and the lender stress tests it against the mortgage interest, which I have explained in my guide to the buy to let stress test. A holiday let lender cannot do that, because there is no single monthly rent. Instead it usually asks a holiday letting agency to estimate the weekly income in low, mid and high season, then works from an average across an assumed number of letting weeks. The property might earn more in six summer weeks than a tenancy pays in six months, then sit near empty in January. The assessment is built around that lumpiness.
Buy to let is assessed on the monthly rent. Holiday lets are assessed on seasonal letting income.
Letting to holiday guests on a buy to let mortgage is a breach of your conditions.
Fewer lenders offer holiday let mortgages, so the market is smaller but workable.
Can I use a buy to let mortgage for a holiday let or Airbnb?
No. A buy to let mortgage is granted on the basis that the property will be let on a standard tenancy. Letting it to holiday guests or on Airbnb instead is a breach of the mortgage conditions, and it usually invalidates your landlord insurance at the same time. If the lender finds out, it can demand changes or, at worst, call in the loan. I have written separately about getting a mortgage for an Airbnb, and the short version is the same: the use has to match the product. If you already own a buy to let and want to move it to short stays, the clean route is remortgaging onto a holiday let product, not quietly changing the listing.
The main differences at a glance
The income basis is the big one: monthly rent on a tenancy against projected seasonal letting income. Behind that sit several practical differences. The buy to let market is large, with most lenders offering something. The holiday let market is smaller, led by building societies and specialist lenders, so there is less choice and criteria vary more from one lender to the next. Deposits sit in similar territory for both, and in both cases the strength of the income evidence shapes the maximum loan as much as any percentage does. I check live criteria case by case rather than working from a fixed figure.
Tenancy law also splits them. A buy to let tenant has the protections of housing law, including everything the Renters’ Rights Act brought in from May 2026. Holiday guests are not tenants, so those rules do not apply, but some councils are bringing in controls on short term lets, which is worth checking with the local authority before you buy.
What about tax?
Tax is an accountant’s territory, not mine, and this is general information rather than advice. The one thing worth knowing before you speak to one: the separate furnished holiday lettings tax regime was abolished in April 2025, which removed several of the advantages holiday lets used to enjoy. Since then the two sit much closer together for tax, and the choice between them rests more on income, use and lending than it used to. Get proper tax advice alongside the mortgage conversation, not after it.
Which one earns more?
It depends on the property and the place, and averages hide the answer. A well located holiday let can beat a tenancy on gross income in a good year, but it carries higher running costs: changeovers, cleaning, marketing, agency fees that are a much bigger slice than a letting agent charges on a tenancy, and empty weeks that pay nothing. A tenancy earns less per week and much more predictably. If you are weighing the numbers, my guide to what makes a good rental yield covers how to compare properties on income properly.
Speak to an expert
Not sure which product fits how you plan to use the property? Call me on 01425 203055 or email info@htgmortgages.com and I will talk you through both routes before you commit.
Switching between the two
Both directions are possible and both are remortgages, not a phone call. Moving from buy to let to holiday let means a new product with a lender that accepts projected letting income, and the property usually needs to suit short stays in an area with genuine demand. Moving the other way, from holiday let to buy to let, means evidencing what the property would rent for on a tenancy and passing the stress test on that figure. In both cases timing matters, because leaving a fixed product early can mean an early repayment charge. If you are part way through a fix, I will tell you what the exit actually costs before you decide anything.
Holiday lets around Hampshire and the south coast
This patch is genuine holiday let country. The New Forest, the Dorset coast and the villages around Salisbury all carry real short stay demand, while Winchester and the towns along the M3 corridor are classic tenancy territory. The same budget can point at two completely different strategies depending on which side of that line you buy, and the mortgage has to match the strategy, not the other way round. If you are local and torn between the two, that is exactly the conversation to have before you offer on anything.
Which mortgage do you actually need?
It comes down to how the property will really be used. Let on a tenancy, it is a buy to let. Let by the week to guests, it is a holiday let. Somewhere you mainly want for yourself that occasionally earns its keep is a different conversation again, and often points at a second home mortgage rather than either. The honest answer for any individual case depends on your income, your plans and the property itself, and working that out is what an advice appointment is for. Call me on 01425 203055 and I will go through it with you.
Need Personal Mortgage Advice?
Every buyer’s situation is different. While this guide explains the general rules, the right mortgage for you depends on your income, deposit, credit history and future plans. If you’d like tailored advice, I’m here to help, with whole-of-market coverage.
