Holiday Let Mortgages: Turning Nightly Rates Into an Income Estimate
A holiday let is rarely full all year, so its income has to be built up night by night. This guide explains the occupancy maths and what lenders do with the result.
What is the Holiday Let Mortgage Calculator?
Holiday lets earn unevenly through the year, so a single monthly rent figure does not fit them. This calculator builds the income from the pieces you actually know: nightly rate times nights per week (7) times weeks let per year times the occupancy percentage within those weeks. That gives an annual income estimate, an average monthly figure, a gross yield against the price, and an interest cover ratio against the interest-only payment. Cleaning, platform fees, management, maintenance, utilities, insurance and tax are all excluded, so net income will be lower than the gross estimate, and some lenders count only part of the projected income.
How to use it
- Enter the property price, deposit, interest rate and term as for any mortgage.
- Enter the nightly rate, how many weeks a year you expect to let, and the occupancy percentage within those weeks.
- Click Calculate Holiday Let Figures to see the loan and payments next to the income, yield and cover ratio.
Worked example
A £300,000 property with a £90,000 deposit gives a £210,000 loan at 70% loan-to-value. At 5.75% over 25 years the repayment payment is about £1,322 a month. At £120 a night for 30 weeks at 80% occupancy, the estimated annual income is £20,160, a 6.72% gross yield.
How is holiday let income estimated?
Nightly rate times 7 nights times weeks let times occupancy. £120 times 7 times 30 weeks times 80% is £20,160 a year, or £1,680 a month on average. Occupancy is the step that turns a headline nightly rate into a realistic figure instead of assuming every night is booked.
Frequently asked questions
How is a holiday let mortgage different from buy-to-let?
Holiday lets are usually assessed on short-term letting income rather than a single monthly tenancy, and lenders often require a larger deposit and evidence of letting demand, such as local occupancy data.
Do lenders count all of the projected income?
Not always. Some lenders use only part of the projected income, or require a minimum personal income alongside it, so the figure here is an estimate, not a lending decision.