Holiday-home financing has unique risks and costs. Lenders often require bigger deposits and stricter underwriting. If you plan to let the property, you may need a specialist holiday-let mortgage. Overseas purchases add legal, tax, and currency complications. Use a specialist mortgage broker and local lawyer, compare products, and factor in higher transaction and ongoing costs.

Buying a holiday home remains popular, but the mortgage rules for a second or holiday property usually differ from a standard residential mortgage. Lenders treat holiday properties - whether in your own country or overseas - as higher risk. That affects deposits, interest rates, and the documentation they require.

How holiday-property mortgages differ

Lenders often expect larger deposits and may charge higher interest rates for holiday homes. They underwrite these mortgages differently: some assess affordability based on rental income if you plan to let the property short term, others treat it as a second home with tighter lending limits and different repayment rules.

If you plan to rent the property as a holiday let, you may need a specialist "holiday-let" or buy-to-let style mortgage. Criteria vary widely by lender and by country - some schemes require a minimum number of nights let per year to qualify for specific tax or mortgage treatment.

Overseas buying adds legal and currency layers

Buying abroad adds legal, tax, and currency risks. Local property law, transaction costs, and ownership rules can be very different from your home country. Exchange-rate movements also change the effective cost of mortgage payments and sale proceeds.

Hire a local solicitor or notary to review contracts and confirm title and local obligations. Get quotes for insurance that covers holiday letting and check whether local governments require rental licences or short-stay registrations.

Tax and transaction costs

Many jurisdictions levy higher purchase taxes or surcharges for second homes or foreign buyers. For example, the UK introduced an additional stamp duty surcharge on second properties in 2016; other countries have similar levies or residency-linked rules. Understand local income-tax treatment on rental profits and whether any tax reliefs apply to furnished holiday lets or equivalent schemes.

Practical checklist before you apply

• Shop the market and compare specialist holiday-let and second-home mortgage products.

• Get a mortgage broker experienced with holiday properties and, for overseas buys, with cross-border financing.

• Confirm deposit, fees, and whether lenders allow short-term lets or require owner occupancy. Deposits commonly run higher than for primary homes (often 20-40%). ¹

• Factor in exchange-rate risk, local taxes, insurance, and maintenance.

• Use a local lawyer to review the sale contract and title.

Bottom line

Holiday-property mortgages are more complex than standard home loans. Do your homework, seek specialist advice, and compare offers. That diligence reduces surprises and helps protect both your investment and your future enjoyment of the property.

1. Confirm typical deposit ranges for holiday-property mortgages in 2025 (commonly quoted 20-40%).
2. Verify current availability and naming of specialist holiday-let mortgage products across major UK lenders and commonly used international lenders.