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The mortgage conundrum for short-term rental owners


short-term rental mortgage

As we step into a new year, many short-term rental owners are taking a hard look at their mortgage strategies. With hopes for more stable financial conditions, securing the right mortgage deal has never been more critical. The decisions you make now could determine your level of flexibility, your costs, and your peace of mind in the years to come (writes Howard Reuben, Principal, HCH Financial Services).


Let’s explore how to approach your mortgage planning in 2025 and navigate the many options available, whether you're securing a new deal or refinancing an existing one.


What makes a mortgage deal right?


A mortgage product isn't just about finding the lowest interest rate – it’s a carefully constructed package. Here are the key components to consider:


  • Interest rate

  • Lender arrangement fees

  • Early redemption and overpayment options

  • Fixed, discounted, or tracker rates

  • Interest-only vs. repayment structures

  • Valuation fees, legal fees, and cash-back offers

  • Ownership type: personal vs. limited company


With so many variables, finding the best fit requires a clear understanding of both the current market and your long-term goals.


A volatile market and the five-year fixed rate expiry


The mortgage market has been highly volatile in recent years, and 2025 marks a major milestone: one of the largest waves of five-year fixed-rate maturities. Many borrowers will face a stark reality as their current rates expire, with new deals likely much higher than what they secured half a decade ago.


The question is: should you commit to another long-term fixed rate, or is it time to explore shorter-term options?


Why a three-year deal might be the sweet spot


For those who feel that another five-year wait is too long, but a one or two-year special offer feels too short, a three-year mortgage product might be the perfect balance.


Here are some options currently available to holiday let investors:

Product

Rate

Rate type

Initial period

Arrangement fee

3-year discount

5.19%

Discount

36 months

£1,500

3-year discount (limited company)

5.35%

Discount

36 months

£1,500

3-year discount

5.59%

Discount

36 months

£999 (includes free valuation)

3-year discount (expat)

5.89%

Discount

36 months

£1,499 (includes free valuation)

What’s the right strategy for you?


  • Long-term fix: if your priority is budgeting stability, locking in a five-year fixed rate may be your best bet.

  • Shorter-term flexibility: for those willing to review their mortgage more frequently, a three-year strategy offers a middle ground between flexibility and cost efficiency.


Keep in mind that frequent remortgaging involves fees, so it’s essential to weigh the benefits against the costs.


Let’s plan for a better financial future


At HCH Financial Services, we specialise in helping property investors navigate the complexities of the mortgage market. Whether you’re looking for peace of mind with a long-term fix or greater flexibility with a shorter-term deal, we’re here to guide you every step of the way.


Contact us today to discuss your options: www.hchfs.com


By staying proactive and informed, you can ensure that your 2025 mortgage strategy supports your goals, keeps costs manageable, and sets you up for success in the years ahead.


Happy New Year from Howard, Samantha, and the entire HCH Financial Services team!

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