Want to own a Guest House or expand an existing one?

Scottish Building Society is pleased to offer Mortgages for people looking to buy or remortgage a Guest House or Bed and Breakfast in Scotland.

5 great reasons to choose a Guest House Mortgage from Scottish Building Society

A mortgage that's specially designed to help you buy a Guest House or B&B in Scotland
You can also remortgage to expand an existing Guest House or B&B
An experienced mortgage provider, with local in-branch mortgage specialists
Competitive interest rates
Quick Lending decisions

Key features of our Guest House Mortgage:

Specially designed to help you buy a Guest House or B&B in Scotland
Maximum loan size is £350,000
We will lend up to a maximum of 75% of the property value or purchase price (whichever is lower)
Available for Guest Houses with a maximum of 6 letting rooms
The owner(s) must reside in the property

Suitable for:    

People looking to buy or remortgage a Guest House with up to 6 letting bedrooms.The business of running the guest house should be the sole occupation of at least one of the parties to the mortgage. The applicant(s) must be able to demonstrate that they have the appropriate expertise to successfully run a guest house business.

Property:    

Guest House Mortgages are to be occupied by you and with a maximum of 9 bedrooms in total and no more than 6 of which may be 'guest rooms'. The owner(s) must reside in the property. All mortgages are subject to a suitable property valuation. For property purchases in Scotland, we can normally use the property valuation contained in the sellers' Home Report provided that it is no more than 3 months old (please speak with our mortgage advisers for further details).

Maximum Loan:    

We will lend up to a maximum of 75% of the property value or purchase price (whichever is lower). For remortgages, the minimum loan size is £30,000. Maximum loan size is £350,000.

Term:  

Applicants must be at least 18 years old on application and normally not more than 70 at end of mortgage term. Minimum mortgage term is 5 years and maximum term is 35 years.

How much can I borrow?    

All applications are dealt with on an individual basis and the amount you can borrow will depend on your circumstances. The following information will be required to assess any application:

  • If you are buying or remortgaging an existing Guest House we will require up to 3 years trading accounts for the business.
  • If you are starting a new business or think an existing business has scope for increased trading then we will require a 12 month cash flow forecast and projected accounts for next 12 months together with a detailed business plan to support your application.
  • Details of any previous business experience you have.
  • Details of any continuing employment or income that you will have in addition to the Guest House business.

 

Any existing financial commitments will also be taken into consideration when affordability is calculated. The Society is not able to consider debt consolidation for Guest House Remortgages.

Remortgage Incentives:    

Free Basic Legal Service: When remortgaging a Guest House property to Scottish Building Society we will provide you with a free basic legal service which means you won't have any solicitors fees to pay. However, the solicitors we use will act only for the Society in the transfer of the mortgage and if you require any additional services or advice you will need to pay for these separately. If you wish to use your own solicitors then the Society will contribute £150 towards your legal costs.

Free Valuation: Scottish Building Society will instruct a valuation when all other conditions have been satisfied.

Repayment:  

  • Capital and interest

or

  • Interest Only. Repayment of the mortgage can be by sale of the Guest House business.

Security:    

A first charge will be taken over the property being purchased or remortgaged as security for the mortgage lending.

Flexible Features:    

Where Early Repayment Charges apply to any of our mortgages you may be allowed to make overpayments (normally up to 10% of the loan amount per annum) without penalty.

Insurances:    

Buildings Insurance must be arranged prior to funds being released. Our advisers can provide competitive quotations for buildings insurance and also life cover. You are not required to arrange these or any other insurances through Scottish Building Society.

To take the next step, call and talk to one of our specialist mortgage advisers. 

0345 600 4085

For full details of all interest rate options currently available please see our interest rate information pages. Our specialist Mortgage advisers can guide you through the application process and help make everything as smooth as possible.

*Please note, we only lend on properties in Scotland*

 

 

 

YOUR QUESTIONS ANSWERED

 

How much can I borrow?

We assess all applications on an individual basis and the amount you can borrow will depend on your circumstances.

What is the maximum loan amount?

We will lend up to a maximum of 75% of the property value or purchase price (whichever is lower). For remortgages, the minimum loan size is £30,000, and the maximum is £350,000.

What information will you need from me?

We aim to keep the whole process as quick and hassle free as possible. We’ll need the following information to assess your application:

  • If you are buying or remortgaging an existing guest house, we will require up to 3 years trading accounts for the business.
  • If you are starting a new business or think an existing business  has scope for increased trading, then we will require a 12-month cash flow forecast and projected accounts for the next 12 months, together with a detailed business plan to support your application.
  • Details of any previous business experience you have. We would expect applicants to have experience of running a guest house/hotel, or have worked in the hospitality industry.
  • Details of any continuing employment or income that you will have in addition to the guest house business.

What about repayment?

Repayment can be Capital and Interest, or Interest Only. Repayment of the mortgage can be by sale of the guest house business.

Capital and Interest – also known as a Repayment Mortgage

This mortgage consists of two parts, the capital and interest. You will repay a part of the overall amount of the loan, as well as the interest accruing each month. At the end of the agreed term of the mortgage, the loan should be paid off completely.

Interest Only Mortgage

With an interest only mortgage, you will only pay the interest accrued on the capital. A suitable repayment vehicle will be required. This mortgage is designed to pay off the capital amount at maturity or sale of the guest house.

Do I need a valuation?

All mortgages are subject to a suitable property valuation.

Do I need to provide security?

A first charge will be taken over the property being purchased or remortgaged as security for the mortgage lending.

Are there any flexible features?

Where Early Repayment Charges apply to any of our mortgages, you may be allowed to make overpayments (normally up to 10% of the loan amount in any rolling 12 month period) without penalty.

Anything else I need to think about?

Buildings Insurance must be arranged prior to funds being released.

New Saver Enquiries

0345 600 0585

New Mortgage Enquiries

0345 600 4085

Existing Member Enquiries

To talk to us about an existing savings or mortgage account, contact your local office

Find your local office

Lines open 9-5 Mon to Fri (10-5 Wed). Calls may be recorded and/or monitored.