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Holiday let criteria

The maximum loan to value per property for purchases and remortgages is:

  • Up to 70% LTV – maximum loan up to £500,000

Any fees that may be added to the loan are excluded from the LTV calculation.

Affordability

All calculations will be based on either the current reference rate published on our website, or the product charging rate plus 2%, whichever is the greater.

The affordability of the application will be assessed in one of two ways:

  • Using the rental income that can be achieved on a monthly Assured Shorthold Tenancy for the property (AST), calculated at the standard Interest Coverage Ratio (ICR) percentages shown in the table below
  • Where two years holiday rental income can be evidenced by accounts, the gross annual rental income, averaged over 12 months, should be equal to or exceed the ICR of 150%. There will be a secondary calculation to ascertain that holiday rental income can also cover a minimum of 100% of the achievable monthly AST rent
Applicant type AST rent used Holiday let income
Basic rate tax payer (20%) 125% 150%
Limited Company 125% 150%
Higher rate tax payers (40%) 140% 150%
Additional rate tax payers (45%) 140% 150%
Property

Available for single self-contained properties only, with no restrictive covenants regarding occupancy in place. The property must be capable of being let on an AST basis and have an acceptable level of rental demand.

The property must be let on an approved holiday occupancy agreement, for a maximum period not exceeding one month. During the life of the mortgage, the property may subsequently be let out on an AST basis.

Submission requirements

  • If the affordability of the application is to be assessed using the holiday rental income, two years accounts must be provided
  • Applicant income information with payslips or self-employed / limited company / limited liability partnership accounts
  • Property schedule detailing all other properties owned
  • Last three months rental bank statements
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Expat criteria

View details
Portfolio BTL

Portfolioproducts

For landlords with four or more mortgaged buy-to-let properties and those operating as limited companies and limited liability partnerships.

Non-Portfolio BTL

Non-portfolioproducts

For landlords with up to three mortgaged buy-to-let properties and consumer buy-to-let customers.

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551

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