Question: My wife and I have had a number of lovely holidays in Suffolk over the last few years and are now thinking about buying ourselves a holiday home.

We would rent it out for part of the year as well as using it ourselves. Do we have to tell our mortgage lender it is a holiday home and we will rent it out?

Answer: What a good idea. Suffolk is a beautiful part of the country. The first thing to say is that you cannot usually buy your holiday home with a normal residential mortgage. If you do, and your lender finds out, it could require you to pay back the loan as you have breached the terms of the mortgage — for example by renting the property out.

However there are a number of lenders offering mortgages specifically for holiday homes that are let out. Alternatively you could increase the mortgage on your existing home and use this to fund the purchase.

Holiday let mortgages assume the property is let out for the majority of the time, but let owners use it for typically up to 90 days a year. The amount you can borrow is based on the rent achieved, plus usually your income.

According to mortgage broker L&C Mortgages, some of the best deals include Melton Building Society which is offering a two year fixed rate deal at 3.09 per cent provided you have a 25 per cent deposit. It has a £999 fee plus a £199 booking fee.

If you fancy a longer fix, Leeds Building Society offers a range of holiday let deals including a five year fix at 3.44 per cent for buyers wanting to borrow 60 percent of the value of the house with a £999 fee.

David Hollingworth, associate director, communications at L&C Mortgages said: “Lenders criteria will vary but one thing to watch out for is homes such as lodges on holiday parks where the property is not available for rent 52 weeks a year as they are excluded. More lenders are starting to look at holiday let loans, as there has been an increase in popularity of staycations.”

For example, he says, Nationwide may allow holiday lets on a property, but they won’t allow anything more than 18 weeks a year.

If you are buying primarily to make money from the house, then you need to factor in all the costs on top of the mortgage. You may need to employ someone to clean the property and wash and change bedding between lets. There may also be letting agent charges and advertising costs.

On the flip side local councils usually charge business rates rather than council tax on holiday lets, which could work out cheaper depending on how much you make. You will also need to pay all the utility bills plus internet and any media services.

Specialist holiday let insurance is also important to protect the building and its contents and you will need a contingency fund to pay for any repairs.