Holiday let mortgages occupy a small but well-defined corner of the UK mortgage market — a handful of specialist building societies and a few mainstream lenders, with criteria and pricing distinct from both residential mortgages and standard buy-to-let. In 2026, after the abolition of the FHL tax regime and against a backdrop of broadly stable interest rates, the market has consolidated somewhat. Cornwall buyers should expect rates in the high 4s to mid 6s, LTV ratios capped at 75% in most cases, and a smaller pool of lenders than five years ago.
Why holiday let mortgages are a separate product
A holiday let mortgage isn't the same as a standard residential mortgage (because you don't live there as main residence) and isn't quite the same as a standard buy-to-let (because the tenancy model is short-term holiday lettings, not assured shorthold tenancies). Specialist lenders price for this difference because:
- Income is seasonal and volatile — different stress-testing required
- Property is typically furnished and operated commercially
- Underwriting needs to assess holiday-let viability (gross rental projection, location appropriateness)
- Property condition and amenities (hot tub, sea view, etc.) affect income capacity
- Risk profile differs — short-term tenants present different damage and void-period risks
Trying to buy a Cornwall holiday let on a standard residential mortgage or even a standard buy-to-let mortgage is usually not allowed under the lender's terms — and even if the initial purchase slips through, it becomes a problem when the property is openly marketed as a holiday let.
The main UK holiday let lenders in 2026
Cumberland Building Society
The most-quoted UK holiday let specialist. 2-year and 5-year fixed rates reduced to 4.78% in December 2025 (from 4.98%), with £999 fee. LTV up to 75%, with a 60% LTV tier introduced in 2025 offering tighter pricing. Lends to first-time holiday let investors. Properties owned in personal name or limited company.
Strengths: well-established product, dedicated holiday let team, strong Cornwall lending track record.
Dudley Building Society
Another active holiday let lender. 2-year fix at 5.90% and 5-year fix at 5.80%, both at 80% LTV — the higher LTV option in the market.
Strengths: 80% LTV available (rare in this segment); flexible criteria for non-standard properties.
Hodge
Particularly strong with portfolio holiday let investors. Rates in the high 5s typically. Strong on properties with proven trading history.
Principality Building Society
Welsh society active in Cornwall holiday-let market. Competitive rates particularly for properties trading 3+ years with demonstrable income.
Furness Building Society
Smaller society but active in holiday let space. Useful for unusual properties (listed, thatched, remote rural).
Leeds Building Society
Returned to the holiday let market in 2024. Competitive rates for premium properties.
The mainstream lenders
HSBC, NatWest, Nationwide, Halifax do not typically lend on holiday lets. Some have niche products in their commercial divisions but the standard mortgage application route doesn't accommodate holiday let purpose.
Typical criteria (2026)
Most UK holiday let lenders in 2026 require:
- LTV maximum 75-80% (Cumberland/Hodge/Principality typically 75%; Dudley 80%)
- Minimum deposit 20-25% from your own funds (not gifted)
- Rental coverage: projected annual rental income ≥ 145% of annual mortgage interest (some lenders 130%)
- Property valuation: includes a holiday-let-specific rental projection from a recognised letting agent
- Minimum income: typically £25,000+ personal income (separate from rental projection) — applicants can't be relying purely on the rental income
- Property type: most lenders accept houses, cottages, flats, but exclude bedsits, mobile homes, narrowboats, properties under £75-100k value
- Maximum number of properties: typically 1-3 holiday lets per applicant; portfolio lenders (Hodge) higher
- Limited company purchases: most lenders allow but with slightly higher rates
The FHL abolition impact on borrowing
The April 2025 abolition of the FHL tax regime has affected borrowing in two ways:
1. Interest deductibility
Pre-April 2025, mortgage interest was fully deductible against rental income for FHL properties. Now it's restricted to a 20% basic-rate tax credit (same as standard buy-to-let). For higher-rate taxpayers, this reduces the after-tax cashflow significantly, particularly on highly-leveraged purchases. See our FHL changes guide.
2. Lender appetite
Some lenders have tightened criteria slightly in response to the FHL changes — rental coverage requirements ticking up, LTV ceilings holding at 75% rather than drifting higher. Net result: borrowing on Cornwall holiday lets is modestly more conservative in 2026 than it was in 2023, though the market is functional.
Indicative 2026 rates (April-May 2026 snapshot)
- 60% LTV, 5-year fix: 4.65-4.95% (Cumberland leading)
- 70-75% LTV, 5-year fix: 4.78-5.40% (Cumberland, Hodge, Principality)
- 75% LTV, 2-year fix: 4.78-5.30%
- 80% LTV, 5-year fix: 5.80-6.30% (Dudley typically)
- Variable / tracker: Bank Base + 1.8-2.8%
Fees typically £999-£1,995 product fee plus valuation costs (£300-£800 depending on property value). Most products accept fees added to the loan.
The rental coverage calculation
Most holiday let lenders stress-test affordability against projected rental income. The calculation:
Projected annual rental income ÷ Annual mortgage interest at stress rate ≥ 145%
Example for a £400,000 Cornwall holiday let with £100,000 deposit, £300,000 mortgage at 5.5% interest, with stress rate adding 1-2%:
- Stress interest at 7%: £21,000/year
- Required projected rental income: £21,000 × 145% = £30,450/year minimum projected gross
For Cornwall premium-area properties (Padstow, Rock, St Ives), £30k+ gross is comfortably achievable. For mid-Cornwall or rural properties, this is the binding constraint that limits how much you can borrow.
The agent rental projection
Most lenders require the rental projection to be evidenced by a letter from a recognised Cornwall letting agency (Sykes, Classic, John Bray, etc.) confirming the projected gross. Some lenders maintain their own panel of approved agencies. Cornwall agencies are familiar with the process and typically provide letters within 1-2 weeks for properties they've inspected.
The projection needs to be realistic — agencies that consistently over-project to help borrowers get loans face lender scrutiny and being removed from approved panels.
Limited company vs personal name
Post-FHL abolition, some Cornwall buyers are considering limited company structures for new holiday let purchases. The case for/against:
Limited company strengths:
- Corporation tax allows full interest deduction (not restricted to 20% basic-rate credit)
- Lower CGT effectively (via reinvested profits)
- Multiple-property portfolios become more tax-efficient
Limited company drawbacks:
- Higher mortgage rates (typically 30-60 bps above personal-name rates)
- Extra Stamp Duty surcharge (3% on top of standard SDLT)
- Ongoing accountancy costs (£800-£2,000/year)
- Double-taxation on dividends drawn (corporation tax then dividend tax)
For single-property purchases, personal name almost always wins. For 4+ property portfolios with significant mortgage debt, limited company starts to make sense. Take specialist advice from a holiday-let accountant before deciding.
Remortgage considerations
Cornwall holiday let owners coming off existing fixed rates in 2026 face:
- Likely higher rates than their previous fix (most pre-2023 fixes were 2-3.5%; new rates 4.5-6%)
- The same LTV constraint at remortgage (property valuation may have moved either way; Cornwall holiday let values broadly flat 2024-2026)
- FHL-abolition impact on cashflow needs to be modelled before locking into new product
- Some product transfers available from existing lender at lower fees than open-market remortgages
Specialist holiday let mortgage brokers (Mortgages for Business, Holiday Cottage Mortgages, Coreco, etc.) are worth engaging — they know the specific products and criteria for this segment better than generic mortgage brokers.
Stamp Duty Land Tax (SDLT)
Holiday let purchases attract:
- Standard SDLT on the property purchase
- Plus 3% additional surcharge for second/additional residential properties (which holiday lets are)
- From 1 April 2025, the 0% SDLT threshold dropped from £250k to £125k — increasing SDLT on most Cornwall purchases
For a £400,000 Cornwall holiday let:
- Standard SDLT (post-April 2025 bands): £7,500
- Plus 3% surcharge: £12,000
- Total SDLT: £19,500
For a £600,000 property: total SDLT £29,500. For a £900,000 Padstow harbourside cottage: £64,500.
What this all means for Cornwall buyers in 2026
- Budget the full purchase costs: deposit (20-25%), SDLT (5-9% of purchase price for most Cornwall properties), legal fees (£1,500-£3,000), valuation (£300-£800), mortgage fee (£999-£1,995), furnishing (£10-£20k+ for ready-to-let standard)
- Get the rental projection done early — before committing to the property. If the projection doesn't support the mortgage size, you need to know before you've spent £2k on solicitors.
- Stress-test cashflow post-FHL. Don't model on 2023 tax rules. Higher-rate taxpayer with £300k mortgage will see ~£3,000/year worse cashflow than the same purchase pre-April 2025.
- Use a specialist broker. Generic mortgage brokers often don't know holiday let products well. Specialist brokers know which lender will fit your specific property and circumstances.
- Plan the limited company question seriously if you're buying property #3 or beyond with significant leverage.
Bottom line
Holiday let mortgages in Cornwall in 2026 are available, well-priced relative to the wider mortgage market, but with conservative LTV ceilings (75% standard) and rental-coverage stress tests that bind on lower-yielding properties. Cumberland, Dudley, Hodge and a handful of others dominate the lender list. Post-FHL abolition affects after-tax cashflow noticeably for leveraged higher-rate-taxpayer buyers — model carefully before committing.
For Cornwall buyers needing a rental projection letter from a recognised agency to support a mortgage application, submit your details and we'll pair you with a Cornwall agency that can produce a realistic projection. For specialist mortgage broker referrals, ask the agency we match you with.