The short answer: most lodge finance needs a deposit of 10% to 20%, with hire purchase terms usually of seven to ten years. But the finance is rarely the biggest cost of owning a lodge. Site fees, running costs and depreciation usually cost more than the interest. This guide explains how lodge finance is priced and shows a worked ten-year cost of ownership, so you can decide with the full picture.
For the buying process itself, see our step-by-step guide to buying a holiday lodge on finance.
What drives the price of lodge finance
Lenders price lodge finance on risk. The main factors are:
Your own finances. Income, existing commitments and credit history matter most. Lenders assess affordability on your income, not on expected rental income.
The deposit. A larger deposit reduces the lender's risk and can improve the terms.
The lodge. Its age, specification and condition. Lodges built to the residential standard BS 3632 and newer units usually attract better terms than older static caravans.
The remaining site licence. Lenders will not normally lend over a term longer than the lodge is allowed to stay on the park.
The term. Longer terms lower the monthly payment but increase the total interest.
How the finance is secured. Borrowing secured on your home is usually cheaper than finance secured only on the lodge, but it puts your home at risk.
Deposits and terms
For hire purchase, expect a deposit of around 10% to 20% of the price. Some packages advertise lower deposits; check how that affects the rate and total cost. Terms are usually seven to ten years, and should never run past the remaining site licence.
The deposit has a direct effect on the amount you borrow. On a £150,000 lodge, a 10% deposit means borrowing £135,000. A 20% deposit means borrowing £120,000, which is £15,000 less to repay with interest.
Park finance or arranging your own
Many parks have a finance partner and can arrange hire purchase on the spot. That is convenient, and sometimes competitive. But the park or its partner may receive commission, and you are entitled to ask how much. Before signing, compare the total amount payable with at least one alternative, such as borrowing arranged independently or secured on your home. Compare like with like: the same amount, the same term, the same deposit.
The real cost: a ten-year worked example
Illustrative only, before any finance interest. Assumes a £150,000 lodge, site fees of £6,000 a year, utilities of £850, insurance of £600 and maintenance and safety checks of £500. Actual costs vary widely by park and lodge.
Running costs: about £7,950 a year, or £79,500 over ten years
Depreciation at 50%: the lodge falls in value by £75,000
Depreciation at 80%: the lodge falls in value by £120,000
Total ten-year cost before interest: about £154,500 to £199,500
Equivalent monthly cost before interest: about £1,288 to £1,663
The finance interest comes on top. This is not a reason not to buy a lodge. Many owners consider the time with family well worth it. But it is the honest comparison, and it is why we describe a lodge as a lifestyle purchase rather than an investment.
The costs people miss
Site fee increases. Check how the park sets annual increases and whether there is a stated basis.
Transfer fees on sale. Some parks charge up to 15% of the sale price when you sell.
Negative equity. If you sell early, the lodge may be worth less than you owe, and the shortfall must be paid.
Balloon payments. Lower monthly payments now, a lump sum later. Only sensible with a plan for paying it.
Upgrades. Decking, furniture packs and hot tubs are often added to the finance, increasing the total interest.
How to keep the cost down
Put down the largest deposit you can without draining your emergency savings.
Choose a term that fits within the licence and your plans, not the longest available.
Pay for extras in cash where possible rather than adding them to the finance.
Compare the park's finance with at least one alternative on the total amount payable.
Check your credit file before applying and avoid several applications close together.
Buy for the lifestyle, and treat any rental income as a bonus rather than the plan.
Frequently asked questions
What deposit do I need for lodge finance?
Usually 10% to 20%. Some offers advertise less, but check the effect on the rate and total cost.
How long can I finance a lodge over?
Typically seven to ten years on hire purchase, and never longer than the remaining site licence.
Is it cheaper to borrow against my home?
Often the rate is lower and the term longer, but your home is then at risk if you cannot keep up repayments. Think carefully before securing a holiday purchase on your main home.
Do lodges hold their value?
Generally no. Depreciation of 50% to 80% over the life of a lodge is not unusual.
Can rental income pay for the finance?
It can help, but most lenders will not count it towards affordability, and bookings vary from year to year.
Talk it through
If you would like an honest view of what a lodge would cost you, finance included, speak to Pinks. More on the funding routes is on our lodge funding page.
Figures are illustrative only. Finance is subject to status and affordability. Think carefully before securing other debts against your home; your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it. Pinks Associates Limited is a credit broker, not a lender. Information correct as at November 2026.
