An 70% Loan to Value (LTV) HMO ReMortgage is a product where an HMO lender allows a borrower, to borrow up to 70% of the HMO property value or purchase price.
This means the borrower is required to put in 30% cash or equity deposit, plus any purchase costs (stamp duty, legals, etc) to complete the HMO property transaction.
Loan to Value (LTV) is calculated as a percentage (%). It’s how much you’re looking to borrow versus the value of the property, you’re looking to purchase or remortgage. If you know how much you’ll need to borrow, just divide the mortgage amount by the value of the property. To use an example, £175,000 ÷ £250,000 = 0.7. Then multiply that by 100 and you get 70% LTV.
LTV is important to think about because it determines the HMO mortgage rate, and affects how HMO mortgage lenders calculate whether the HMO mortgage is right for you. The lower your LTV, the lower the rates, and the more mortgage options you’ll have.
A 70% Loan to Value (LTV) HMO remortgage is at the upper end of the typical range. HMO lenders offer between 30% and 85% loan to value. With 70% LTV, you’ll have plenty of good options to choose from, but it could be worth thinking about whether you’re able to increase your cash deposit and therefore lower your LTV. This could open up many more options with better deals and a lower true cost, meaning you’ll pay less in the long run.
Allowing you to raise the maximum available loan
Allowing you to gain the highest possible leverage
Low cash or equity input required to complete the transaction