Holiday Let Mortgage Calculator for Expats and Foreign Nationals
A cottage in Cornwall or a flat in the Lake District can earn far more in a good summer than the same property let to a long-term tenant. Lenders know that, but they also know the income is seasonal, and they assess it differently. Add overseas income, the non-resident stamp duty surcharge and the fact that you will be managing the property from another country, and a standard buy-to-let calculator stops being much use.
This calculator is built for that situation. Enter the property price, your deposit and a letting agent’s low, mid and high season weekly rates. It works out the income a lender will count, whether that income passes the rental stress test, the largest loan available, the stamp duty you will pay as an overseas buyer and how much the property should leave you each year once the costs are paid.
It is aimed at British nationals living abroad and foreign nationals buying a UK holiday let, whether in their own name or through a UK limited company.
How the Calculator Works
The first section covers the price, your deposit and the most the lender will lend as a share of the value. Holiday let lenders are more cautious than mainstream buy-to-let lenders, so 70% to 75% is a realistic ceiling for most overseas buyers.
Next come the three seasonal rates. Lenders rarely accept a single annual rent figure on a holiday let. Instead, a specialist letting agent quotes a weekly price for the quiet months, the shoulder months and high summer. The lender averages the three and applies that figure across the weeks the agent expects the property to be booked. Put in the agent’s projection for weeks let, usually somewhere between 20 and 30 for a well-run coastal or rural let.
Running costs follow. On a holiday let they are much heavier than on an ordinary rental, because someone has to clean and change the linen between every booking, and both the listing sites and the management agent take a cut. Allow around 30% of income for those, then add the fixed bills for insurance, utilities and business rates.
Finally, set the mortgage rate and the lender’s stress test. The results show the maximum loan, which limit is holding it back, your monthly payment, the yield and cashflow, the stamp duty and the cash you need on completion.
How Lenders Assess a Holiday Let
Most lenders treat a holiday let much like a buy-to-let, with one big difference: the income is projected, not contracted. There is no tenancy agreement to show them, only an agent’s forecast. That is why many lenders want the forecast to come from an established local agent and why some apply extra caution, either by assuming fewer weeks let or by testing at a higher cover ratio.
The test itself works like this. Interest is worked out at a stress rate, usually close to 5.5%, and the projected yearly income has to exceed it by 125% or 145%. Limited companies and basic rate taxpayers usually face 125%. Higher rate taxpayers usually face 145%. If the income falls short, the loan comes down until it passes.
Lenders also look at you. Most expect a personal income of at least £25,000 a year, many want to see previous experience as a landlord, and some limit how many nights you can use the property yourself. A few lenders will not consider applicants living in certain countries, and almost all want the deposit traced back to its source.
What Changes for Expats and Foreign Nationals
Living abroad narrows the field. Fewer lenders offer holiday let mortgages than standard buy-to-let, and fewer again will lend to someone overseas. Those that do usually want a larger deposit, a UK bank account for the mortgage payments and evidence that the property will be properly managed while you are not there.
That last point matters more than many buyers expect. A lender wants to know who will handle bookings, cleaning, repairs and guest problems, so a management agreement with a local agent often forms part of the application. It also affects your figures, because full management typically costs 20% to 30% of the booking income before cleaning.
Foreign nationals who plan to build up more than one property often buy through a UK limited company set up for the purpose. That brings the 125% cover test into play and keeps the rental profit inside the company. It also means the 5% additional property rate applies to every purchase, whatever else you own.
Stamp Duty on a Holiday Let Bought From Abroad
Buying in England or Northern Ireland as a non-UK resident adds a 2% surcharge to stamp duty. If you already own a home anywhere in the world, or you are buying through a company, the 5% rate for additional properties applies too. Most overseas holiday let buyers therefore pay 7% on top of the standard rates, and the calculator assumes both unless you untick them.
On a £350,000 cottage, that is £7,500 at standard rates and another £24,500 in surcharges, giving £32,000 in total. Budget for it from the start, because it cannot be added to the mortgage.
Wales works differently. It charges Land Transaction Tax rather than stamp duty, councils there can levy a premium of up to 300% on second homes, and a self-catering property must be let for at least 182 days a year to pay business rates instead of council tax. In England the equivalent tests are 140 days available and 70 days actually let.
Tax After the End of the FHL Regime
Until April 2025, furnished holiday lets that met the letting tests enjoyed their own tax treatment. That regime has now been abolished. Holiday lets are taxed like any other rental property, so mortgage interest only attracts a basic rate tax credit, capital allowances on new furniture are no longer available and the special capital gains reliefs have gone.
Non-resident owners pay UK income tax on UK rental profits. Under the Non-Resident Landlord Scheme, your letting agent must deduct basic rate tax from the income unless HMRC has approved you to receive it gross. Depending on where you live, you may also need to report the income at home and claim credit for the UK tax paid. Take advice from a tax specialist who understands both countries.
Worked Examples
The two cases below use the calculator’s default assumptions and show how differently two holiday lets can turn out.
Example 1: A Cornish Cottage Bought From Hong Kong
A British couple based in Hong Kong buy a £350,000 cottage on the Cornish coast, putting down 25% and borrowing £262,500 on interest-only at 5.75%. A local agent projects £650 a week in winter, £1,000 in spring and autumn and £1,600 in summer, an average of about £1,083, and expects 30 weeks of bookings.
That gives projected income of £32,500. At a 5.5% stress rate the interest on £262,500 is £14,438 a year, so cover comes out at 225%, well clear of the 145% test. The rent would support about £407,500 of borrowing, which means the 75% LTV limit is what sets the loan here.
Costs take a large slice. Management, cleaning and platform fees at 30% come to £9,750, and other running costs add £4,000, leaving £18,750 before the mortgage, a net yield of 5.4%. After £15,094 of interest the property makes about £3,656 a year. Because the couple own their Hong Kong flat, stamp duty is £32,000, so they need £119,500 in cash to complete.
Example 2: A Lakeland Apartment Through a Company
A German national living in Munich sets up a UK company to buy a £240,000 apartment in the Lake District. Rates are lower here, at £400, £550 and £800 a week, and the agent expects only 20 weeks of bookings because the property is new to the market.
Projected income is about £11,667. The company is tested at 125%, but with a 25% deposit the stressed interest on £180,000 is £9,900, and cover comes out at only 118%. The lender reduces the loan to about £169,700, so the deposit rises to roughly £70,300, around £10,300 more than planned.
The returns are thin. After 30% fees and £3,500 of other costs, the property earns about £4,667 before the mortgage, a net yield of 1.9%, and interest at 5.75% turns that into a loss of around £5,091 a year. Stamp duty, with both surcharges applying to a company purchase, is £19,100. This is exactly the kind of deal the calculator is designed to catch before an offer goes in.
These examples are illustrations based on typical lender criteria, not specific client cases. Rates, stress tests and maximum loans vary between lenders.
What the Calculator Cannot Tell You
Seasonal income is an estimate, and lenders know it. Your actual bookings will depend on the location, the quality of the property, how it is marketed and how the season goes. A lender’s valuer will also produce their own view of rental income, and it can come in lower than your agent’s.
Local rules can stop a deal entirely. Some leasehold flats ban short lets in the lease, some new developments carry restrictions on holiday use, and in London short lets are limited to 90 nights a year without planning permission. Check these points before you commit, not after.
Frequently Asked Questions
Can an expat get a holiday let mortgage in the UK?
Yes, although fewer lenders offer them than standard buy-to-let mortgages.
Expect to need a deposit of around 25% to 30%, a minimum personal income and evidence that the property will be managed locally while you are abroad.
How do lenders work out holiday let income?
They take a letting agent’s weekly rates for the low, mid and high seasons, average them and multiply by the expected number of weeks let.
The result is tested against the mortgage interest at a stressed rate.
What deposit do foreign nationals need for a holiday let?
Most lenders want at least 25%, and some ask for 30% or more from foreign nationals or first-time landlords.
A larger deposit also makes the rental cover test easier to pass.
Can I buy a UK holiday let through a limited company from abroad?
Yes.
Many foreign nationals use a UK company set up for the purpose. Company purchases are usually tested at 125% cover, but the 5% additional property stamp duty rate applies to every purchase.
How much stamp duty will I pay on a holiday let as a non-resident?
In England and Northern Ireland you pay standard stamp duty plus 2% for being non-resident and 5% if you already own a home anywhere or are buying through a company.
On a £350,000 property that adds up to £32,000.
Did the end of the FHL regime affect holiday let mortgages?
It changed the tax rather than the lending.
Since April 2025 holiday lets are taxed like ordinary rentals, which reduces the after-tax return for many owners, so it is worth running the numbers again before you buy.
Can I use the holiday let myself?
Usually, within limits.
Many lenders restrict how many nights a year the owner can stay, so check the lender’s terms if personal use matters to you.
Final Thoughts
If you have any questions relating to holiday let mortgages for expats or the figures from our calculator, contact us today to speak directly with one of our expat mortgage advisors.
Expat Mortgages UK is a specialist broker directly authorised and regulated by the Financial Conduct Authority. We work exclusively with expats and foreign nationals buying UK property with overseas income. Most holiday let mortgages are not regulated by the Financial Conduct Authority. Your property may be repossessed if you do not keep up repayments on a loan secured against it.
Call: +44 1494 622 555
Email: info@expatmortgages-uk.com
Related Pages
- Expat Mortgage Case Studies – purchases and remortgages we have arranged for clients living abroad
- How Much Can Expats Borrow on a UK Mortgage? – income multiples, currency adjustments and lender limits
- UK Expat Mortgage Application Process – how to prepare and structure an application from abroad
- Can Expats Get a UK Mortgage? – eligibility and what specialist lenders look for
- Building a UK Credit History as an Expat – steps that help a mortgage application