HMO Mortgages

An HMO mortgage is a type of mortgage specifically designed for HMO or multi-let properties. It allows for the letting of the property under multiple tenancies under the terms and conditions of the HMO mortgage.

Normal BTL mortgages do not allow for the letting of property under multiple tenancies under their mortgage terms and conditions.  Subsequent to this, the letting of any property as a multi-let or HMO, but using a normal BTL mortgage will likely breach the terms and conditions of a normal BTL lender.

If a BTL mortgage lender finds out that this has occurred (via the HMO register for example) the consequences can be severe.  The repercussions can include but are not limited to the lender having the ability and legal right to recall the mortgage with little or no notice.  Your credit rating may also be at risk, and you will unlikely be able to gain any lending with that particular mortgage lender.

Top 10 Best HMO Mortgage Rates

HMO Mortgages are similar to standard buy to let mortgages. They carry the same structure and format, and are administered in the same way but have some key differences that allow borrowers to stay compliant and also anticipate the HMO mortgage application and drawdown process.

The main key difference is that HMO Mortgages allow for the use of multiple tenancies against one property, whereas normal BTL mortgage lenders prohibit this in their mortgage terms and conditions.  Average loan processing times tend to be marginally longer with HMO Mortgages compared to normal BTL mortgages.  This is due to the increased complexity in dealing with multiple tenancies, HMO licensing, HMO planning permission and other HMO regulations.  Lenders need to do a few extra, but simple checks surrounding both the property and the (potential) HMO licence holder.  Any good HMO Mortgage Broker will be able to guide you through this process with ease.

There are currently around 30 HMO Mortgage Lenders operating in the UK residential property market.  They bring some 800+ specific HMO mortgage products to the HMO market along with years of expertise and also mountains of great data.

HMO Lenders provide loans which range from a minimum of £50,000 to a maximum of £15 million, from 4 bedroom multi-let all the way up to 300 unit student and co-living HMO blocks. 

The HMO mortgage products and the HMO mortgage interest rates are comparable in type to standard Buy to Let products, with the differences as listed above.  To give you an idea of the most popular products currently available on the market across all lenders we have put together the following table which gets updated monthly.

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