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HMO mortgages

Are you interested in investing in a HMO property?

 
 
 
 
  • Our experts can help you secure the funds needed for your investments.
  • Whether you’re looking to increase an existing portfolio or purchase your very first HMO, we can support you!
  • We’ve helped lots of clients achieve their property investment goals, so we have the expertise and products to assist you.
  • To get your personalised quote and speak to an expert, call us on 0800 032 3535. Alternatively, email us to schedule a call at a convenient time for you.

Any property used as security, which may include your home, may be repossessed if you do not keep up repayments on your mortgage.

HMO mortgages

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Loans against BTL properties are unregulated, which means they are not subject to the protections of regulation, including; supervision by the Financial conduct authority which helps to protect consumers against bad advice, and being covered by the Financial Services Compensation Scheme (FSCS)

Magnifying glass house HMO Mortgages

What is a HMO?

 
 
 
 

Houses of multiple occupancy are rental properties which have at least three non-related tenants living in it. These tenants will share facilities together, such as kitchens and bathrooms. 

The key distinguishing factor of these properties to standard buy to lets is that multiple households can live there at one time.

One of the most common examples is student properties, where you have multiple people from different households all living together in a shared accommodation unit.

Properties of this type are becoming more popular, as the returns can often be much higher than traditional buy to lets. 

Our experts have a variety of HMO mortgages available that can help you buy or remortgage these properties, allowing you to get your plans underway and start earning some extra income.

What is a HMO mortgage?

 
 
 
 

HMO mortgages are a type of borrowing solution, which helps you to purchase or remortgage a house of multiple occupancy.

These solutions are therefore designed to assist landlords, as they are typically used for renting out to a selected group of unrelated people.

Our team are experts at handling HMO purchases and HMO remortgages, so we have the right products and skills to assist with your enquiry.

Solutions range from £10,000 up to £5m, with both capital repayment and interest only options available.

If you’d like to discuss what could be achievable for you, either call 0800 032 3535 or email us.

keys house hmo mortgages

Do you need HMO housing experience to qualify for a mortgage?

 
 
 
 

Having experience can be beneficial when it comes to applying for a mortgage on these properties, as it indicates that you may be a more reliable borrower. Due to this, it may be easier to get accepted and you may qualify for lower interest rates.

However, experience is not necessary. It can definitely help to support your application and make the process less complicated, but there are still solutions available if you have little or no experience at all in this field.

Even if you’re a first time landlord who doesn’t have any buy to let experience at all, there are still options open to you. 

Our team has helped many customers in this exact situation before, so we have the necessary experience to support you.

Is it a good idea?

 
 
 
 

Investing in a HMO rental can be a lucrative and beneficial opportunity for landlords. Some of the benefits may include:

  • Higher returns – Rental returns for these properties can be much higher than traditional buy to lets.
  • Lower void periods – It’s unlikely that all your tenants would move out at the exact same time (unless it’s a student property investment, where there may be movement around term times). Therefore, there will be less periods when the property is completely vacant.
  • Income protection–Even if one tenant misses their rent payments, you will still be receiving income from the remaining household members. In comparison, with a standard buy to let property if your tenant misses rent payments, you will receive no income at all.

Although these are great benefits, it is also important to consider the potential downsides to these investments. Some of these disadvantages may include:

  • Increased regulation – There are more rules and legislation around these properties, which means you may need to engage in more planning to factor in these different requirements.
  • Higher upfront costs – As these properties can be much larger in size there may be more work required to get them up to scratch, particularly if it is being let fully furnished. Therefore, you may have higher upfront costs.
  • Stricter criteria – The qualifying criteria for these products can be stricter, so it may be harder for you to get approved.

What’s the difference between a HMO and a MUFB?

 
 
 
 

As previously highlighted, HMO housing is a type of shared accommodation that consists of tenants who are not related.

Multi-unit freehold blocks however are properties that are split into self-contained living spaces (such as apartments, flats and studios), but they are held under one title.

They differ from HMOs in that the facilities are not shared between different tenants, instead they are only used by the person or household living there.

An example of a MUFB could be a house which has been converted into flats. All of the tenants will have their own space entirely to themselves and they will not need to leave their accommodation to access certain facilities.

If you’re looking into investing in one of these properties you will need to look at options for a multi-unit freehold block mortgage.

Our experts offer mortgage products for both property types, so we are likely to have a solution available that meets your plans.

How do you apply for a HMO mortgage?

 
 
 
 

Applying for this solution is straight-forward, it all starts with a single call or email.

1. Simply call 0800 032 3535 or email our experts to submit an enquiry. Alternatively, you can fill out our quick online form above and we will contact you.
2. Our advisors will talk you through the best options we have available for your specific circumstances.
3. You decide if our product is the right fit for you! If it is, we’ll work with the lender to get your funds sorted.

Frequently Asked Questions - HMO mortgages

 
 
 
 

Will I need a HMO licence?

In short, if it is a large property you will need to apply for a licence. The licence needs to be obtained from the local council where the property is. It’s important to check the criteria and policy details with the council you’re applying to, as these can vary across different locations. 

For smaller properties however you may not be required to get a licence. Some councils still need you to get a licence whether the property is large or small, but others are more relaxed. Therefore, it’s important to check with the council first to see whether you definitely need to apply for one.

How much deposit do you need for a HMO?

The amount of deposit you need can vary depending on which lender you go to. Having a larger deposit can open up more options and help you get a better deal.  Therefore, it is advisable to try and save up as much as you can.

However, some lenders (mainly specialist providers) are much more flexible with their criteria, meaning they may accept smaller deposits.

Where can you get HMO mortgages?

Mortgage products for these properties can be accessed through a bank, lender or a broker.

You can go to any provider you wish, however it may be more appropriate to speak with a broker if you have little or no experience in this area. Brokers have access to a much larger range of products and therefore your chances of finding a solution may be greater.

Are HMO mortgages more expensive?

These products are usually more expensive than standard buy to let mortgages, because there are fewer lenders who operate in the market.

The lenders who do offer these solutions tend to charge higher interest rates and larger fees, due to the reduced competition.

Can a first time buyer get a HMO rental?

Yes, you absolutely can get one of these properties even if you’re a first time buyer or a first time landlord.

The process can be a bit more complicated, as the risk of lending to you is greater when you don’t have any sort of housing track record. Despite this, there are lots of solutions available that you can get.

We have a wide range of lenders on our panel who specialise in helping customers with more complex circumstances (including first time buyers and those with little or no HMO housing experience). Therefore, we may have the solution you’ve been looking for.  

What our customers say about us

 
 
 
 
Feefo Platinum Service Award
"Very helpful in finding the best product for my finances, kept me updated all the way. Always on hand to answer any questions, nice friendly staff."

Mr H, Widnes
07 Jul 2022

"Excellent service."

Mr M, Cheshunt
29 Jun 2022

"Really good company, kept us updated along the way with calls and emails."

Mr S, Banstead
23 Jun 2022

"Fantastic from start to finish. Highly recommend."

Mr B, Worthing
21 Jun 2022

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