A holiday let property can provide a valuable income and potential long-term capital growth. There's also the potential added bonus of being able to use the property yourself from time to time.

But you'll need a specific holiday let mortgage if you want to borrow to buy the property - rather than a standard buy-to-let mortgage. Tax reliefs currently available on some types of furnished holiday lets are ending soon, so you'll need to consider this too.

Our guide explains more about how holiday let mortgages work and what to consider when making this kind of investment.

Holiday let mortgages work in a similar way to buy-to-let mortgages - see more on the difference in our FAQs below. But because holiday lets are rented out to lots of different people - and on a much shorter-term basis - they are viewed by lenders as more risky.

For this reason eligibility requirements for holiday let mortgages tend to be stricter. Lenders may require a larger deposit for example, plus the mortgage rates you're offered could be higher than with a buy-to-let deal.

Nick Mendes, mortgage broker at John Charcol, explains: "While both holiday let and buy-to-let mortgages are used for renting out a property, the big difference is in the way the house is rented out.

"A buy-to-let property will usually be rented out for longer periods of time, typically six months to one year, to the same person. This means you'll usually have a more stable form of income from the property.

"In contrast, with a holiday let, the property is rented out for short timeframes to different people. This difference can affect how easy it is to get a mortgage, and what you'll pay for the borrowing."

Currently, there are only around 30 lenders that offer holiday let loans which compares to around 80 lenders operating in the buy-to-let market - so the choice is more limited too.

This will depend on a number of factors:

Right now, some owners of qualifying furnished holiday lets (FHL) benefit from specific tax breaks, which are not available to buy-to-let landlords.

These include, in some cases, tax relief on mortgage interest, as well as the costs of furniture, fixtures and fittings in the property. There is also capital gains tax relief on the sale of a qualifying FHL property.

To be eligible for the tax breaks, a FHL property has to meet specific eligibility criteria. For example, the property must be:

However, these tax breaks will only continue to be available until April 2025 having been scrapped under the previous Conservative government. It appears unlikely the new Labour government will overturn this decision.

Many landlords are predicted to sell their investment properties, including holiday lets and second homes, as tax changes become less favourable.

If you are considering buying a holiday let, it's important to seriously consider the tax implications from April 2025 onwards on your investment. It may also be worth seeking independent, professional tax advice.

Tax treatment depends on one's individual circumstances and may be subject to future change. The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of tax advice.

The income required to be eligible for a holiday let loan will depend on the rental income you can achieve from letting out the property.

Many mortgage lenders calculate an average rental income, based on the rent you can achieve in low and peak holiday seasons. Lenders will then also stress test these calculations which means applying a higher rate of interest.

With all these factors combined, lenders will want the property rental income to provide a minimum of between 125% and 145% of the monthly payments on your mortgage.

As a borrower you must ensure you can cover all your mortgage payments throughout the year, regardless of the season or when your holiday let may be empty. It's important to keep some of the rental income made during peak times back to cover any shortfall during the low season.

A small handful of lenders may consider the borrower's own income to cover some of the mortgage for affordability assessments - a process known as top-slicing - but choice is limited.

With strict lending criteria, changing tax rules, and a range of costs to consider, it's especially important for holiday let investors to do their research.

Jonathan Bone, mortgage lead at online broker Better, says: "Review the area thoroughly, check how much you could rent the holiday let for in high, medium and low seasons, and ensure you are keeping money back from the high season to be able to cover void periods, such as in the winter months when demand may be low."

Buying a holiday home for your own use is considered as buying an 'additional' home if you are already a homeowner. And so long as your affordability stacks up you can do this with a standard residential mortgage.

It's then unlikely to be a problem letting out your home for short periods to friends and family, for example. But if you intend to let your second home out for most of the year - and run as more of a business - then you'll likely need to switch to a holiday let mortgage.

Whether you're considering buying a new holiday let, or you're looking to remortgage, you can get advice and compare holiday let mortgage deals with an independent, professional mortgage advisor.