Interest cover ratio
There are no minimum personal income requirements for holiday let mortgages, but your client will need to show the property can yield a minimum rental income of 145% of interest payments at either:
- 2 year fixed – the higher of pay rate + 2% or 5.5% *
- 5 year fixed – pay rate
We take an average of 30 weeks rental income using an average of the weekly high season, medium season and low season rental income figures they provide on the application form.
*For £4£ Remo a reduced stress of pay rate + 1% is used.
If the property has previously been let out, we’ll also verify the rent by comparing the previous 12 months actual rental income with those from a local agent or holiday letting website.