Limited Company HMO Mortgage Rates: What You'll Pay in 2026

If you are buying an HMO through a limited company, you will pay more for your mortgage than a personal-name borrower — but how much more, and does it actually matter once tax is factored in?

This guide breaks down current limited company HMO mortgage rates, explains the premium, and shows you the true cost of borrowing through an SPV when you account for arrangement fees, stress testing, and total interest paid over a typical product term.

We compare rates across lenders to help you understand the market. For mortgage arrangement, speak to a qualified broker.

Current Limited Company HMO Mortgage Rate Ranges (2026)

As of early 2026, limited company HMO mortgage rates sit in the following ranges:

Product Type	Rate Range	Typical LTV
2-year fixed	4.8% – 6.2%	65% – 75%
5-year fixed	5.1% – 6.5%	65% – 75%
Variable / tracker	5.0% – 6.0%	65% – 75%
Larger HMOs (7+ beds)	5.5% – 7.5%	60% – 70%

These are indicative ranges based on products available through specialist lenders and mainstream BTL lenders with company lending panels. Actual rates depend on individual circumstances — LTV, bed count, borrower experience, and property location all play a role.

Rates at the lower end of these ranges are typically reserved for straightforward cases: 6-bed or fewer, experienced landlord directors, clean credit, and properties in strong rental markets. As you move toward larger HMOs, first-time landlords, or properties in less established areas, rates climb toward the upper end.

It is also worth noting that rate movements in the limited company HMO market tend to lag behind the wider mortgage market. When base rates change, personal-name products are typically repriced first, with company products following weeks or months later. This means there can be windows where the company premium temporarily widens or narrows relative to its usual level.

For live rate data updated regularly, check our rate comparison page.

How Much More Do You Pay for a Limited Company HMO Mortgage?

The rate premium for limited company lending has compressed over the past three years as competition has increased. Currently:

Typical premium: 0.3% to 0.5% above equivalent personal-name products
Best case: Some specialist lenders price company and personal products identically
Worst case: Complex situations (trading company, larger HMO, limited experience) can see premiums of 0.75% to 1.0%

On a £200,000 mortgage, a 0.4% premium equates to £800 per year — or £67 per month — in additional interest. For most higher-rate taxpayers, the tax saving from holding in a company structure significantly exceeds this.

Rate Comparison Table: Limited Company vs Personal Name

Side-by-side comparison at 75% LTV on a standard 6-bed HMO:

Product	Personal Name	Limited Company	Premium
2-year fixed (best rate)	~4.5%	~4.8%	+0.3%
2-year fixed (typical)	~5.0%	~5.4%	+0.4%
5-year fixed (best rate)	~4.8%	~5.1%	+0.3%
5-year fixed (typical)	~5.3%	~5.7%	+0.4%
Arrangement fee	1.0% – 2.0%	1.0% – 2.5%	+0 to 0.5%

Note: "best rate" products typically require lower LTV (65% or below) and may have higher arrangement fees. The cheapest headline rate is not always the cheapest overall cost.

For a detailed structural comparison beyond rates, see our SPV vs personal name HMO guide.

For more on this topic, see our guide to Leveraging HMO Bridging Finance for Quick Purchases.

What Affects Your Limited Company HMO Rate?

Several factors determine where in the rate range your mortgage will land:

LTV (Loan to Value)

The single biggest rate determinant. Rates improve materially at lower LTVs:

LTV Band	Typical Rate Improvement
75%	Standard rate
70%	-0.1% to -0.2%
65%	-0.2% to -0.4%
60% and below	-0.3% to -0.6%

If you can stretch to a 35% deposit rather than 25%, the rate improvement often exceeds the premium you are paying for company lending.

Bed Count

Standard HMO products (up to 6 beds) attract the most competitive rates. Above 6 beds, the lender pool narrows and rates increase:

3–6 beds: Widest product range, most competitive rates
7–8 beds: Specialist lenders, typically 0.25% – 0.5% above standard HMO rates
9+ beds: Commercial or specialist lending, rates from 5.5% upward

Borrower Experience

Lenders with the most competitive rates typically require property investment experience — usually 12–24 months as a landlord. First-time landlord products exist but often carry a rate loading of 0.25% to 0.5%.

Property Type and Location

Location affects rate through the lender's risk assessment. Properties in strong rental markets with proven HMO demand attract better pricing. Unusual property types (converted commercial, above-commercial, non-standard construction) may attract loadings.

Loan Size

Very small loans (under £100,000) may attract rate loadings because the lender's fixed costs per application are the same regardless of loan size. Some lenders set minimum loan thresholds for company lending — typically £75,000 to £100,000. Conversely, very large loans (above £1m) may qualify for bespoke pricing from specialist or private lenders.

Company Age and Track Record

While most lenders accept newly incorporated SPVs, some offer preferential rates to companies with filed accounts showing a track record of property investment. If your SPV has been operating for 2+ years with clean accounts, this may unlock products not available to a day-old company.

Arrangement Fees and Product Costs for Limited Company HMO Mortgages

The headline interest rate tells only part of the story. Arrangement fees, valuation costs, and legal fees all affect the true cost:

Arrangement Fees

Fee Type	Typical Range
Percentage-based	1.0% – 2.5% of loan
Fixed fee	£995 – £2,995
Fee-free products	Higher headline rate (typically +0.3% – 0.5%)

A 2% arrangement fee on a £200,000 mortgage is £4,000 — equivalent to roughly 0.8% added to a 5-year fixed rate when spread across the term. Always calculate the total cost including fees, not just the headline rate.

Valuation Fees

HMO valuations typically cost more than standard residential valuations:

Valuation Type	Typical Cost
Standard residential (bricks & mortar)	£300 – £600
HMO / semi-commercial	£500 – £1,200
Full commercial valuation (larger HMOs)	£1,000 – £2,500

Some lenders offer free valuations as part of their product package. Factor this into your total cost comparison.

Legal Fees

Limited company mortgages typically require separate legal representation for the company and the lender. Budget £800 – £1,500 for legal costs, versus £500 – £1,000 for personal-name transactions.

Stress Testing — How Lenders Assess Affordability for Company HMOs

Lenders stress test rental income against mortgage payments at a rate higher than the actual product rate. This determines the maximum loan size.

Typical stress test parameters for limited company HMO mortgages:

Lender Type	Stress Rate	ICR (Interest Coverage Ratio)
Mainstream BTL	5.5% – 6.5%	125% – 145%
Specialist	5.0% – 6.0%	125% – 130%
Commercial	Varies	130% – 150%

Important: Many lenders apply a lower stress rate for limited company borrowers than for personal-name borrowers (e.g. 125% ICR for company vs 145% for personal). This means you may actually be able to borrow more through a company — partially offsetting the higher interest rate.

Use the HMO mortgage calculator to model affordability under different stress test scenarios.

Fixed vs Variable Rates for Limited Company HMOs

Fixed Rates

The majority of limited company HMO mortgages are taken on fixed rates — most commonly 2-year or 5-year terms. Fixed rates provide certainty for cashflow modelling and protect against rate rises.

2-year fixed: Lower initial rate but you face remortgage costs and potential rate changes sooner. Product fees are amortised over a shorter period, increasing the effective cost.

5-year fixed: Slightly higher rate but greater stability. Product fees spread over 5 years reduce the effective cost. Most popular choice for portfolio landlords seeking predictability.

Variable / Tracker Rates

Variable rates for company HMO mortgages are less common but available from some specialist lenders. They track the Bank of England base rate plus a margin (typically 3.5% – 5.0%).

Advantages: no early repayment charges, flexibility to repay or remortgage at any time. Disadvantage: rate uncertainty, which makes cashflow modelling harder.

Which to Choose?

For most limited company HMO investors, a 5-year fixed rate offers the best balance of cost certainty and fee amortisation. Variable rates suit investors who expect to sell or refinance within 1–2 years and want to avoid ERCs.

Early Repayment Charges (ERCs)

ERCs on limited company HMO mortgages are typically structured as a declining percentage of the outstanding balance:

Year	Typical ERC (2-Year Fixed)	Typical ERC (5-Year Fixed)
Year 1	2% – 3%	5% – 3%
Year 2	1% – 2%	4% – 3%
Year 3	N/A (product ended)	3% – 2%
Year 4	—	2% – 1%
Year 5	—	1%

On a £225,000 mortgage, a 3% ERC is £6,750 — a significant cost if you need to exit the product early. Factor ERCs into your decision between fixed and variable, particularly if there is any chance you may sell or refinance during the product term.

For a deeper comparison of rate types, see our guides to fixed rate HMO mortgages and variable rate HMO mortgages.

How to Secure the Best Limited Company HMO Rate

Eight practical steps to improving your rate:

Maximise your deposit. Moving from 75% to 65% LTV can save 0.3% or more on rate.
Build landlord experience. Even 12 months of managing a property opens up better-priced lender panels.
Keep the bed count at 6 or below. Where feasible, staying within the standard HMO bracket avoids the specialist lending premium.
Use an SPV, not a trading company. SPVs access wider lender panels and better rates than trading companies.
Choose SIC codes carefully. Stick to property-related codes (68100, 68209). Non-property codes can restrict lender options.
Compare total cost, not headline rate. A lower rate with a 2.5% fee may cost more over 5 years than a higher rate with no fee.
Get your documentation in order. Delayed applications can mean rate expiry and reapplication at potentially higher rates.
Use a specialist broker. Brokers with access to the full HMO lending market can identify products and lenders you would not find on comparison sites.
Time your application strategically. Lenders periodically run promotional products with reduced rates or fee-free options to hit lending targets. These are typically available for limited windows. A broker can alert you to these opportunities as they arise.
Consider the lender's standard variable rate (SVR). When your product term ends, you revert to the lender's SVR — which can be 2%–3% above your fixed rate. Budget for this in your cashflow planning and set reminders to remortgage before the product term expires.

For lender-by-lender analysis, see our HMO mortgage lenders compared guide and the lender directory.

Total Cost of Borrowing — Worked Example

Let us model the true cost of a limited company HMO mortgage versus a personal-name equivalent over a 5-year fixed term:

Scenario: 6-bed HMO, purchase price £300,000, 75% LTV (£225,000 mortgage)

Cost Item	Personal Name	Limited Company
Interest rate	5.0% fixed	5.4% fixed
Annual interest	£11,250	£12,150
5-year interest total	£56,250	£60,750
Arrangement fee (1.5%)	£3,375	£3,375
Valuation fee	£400	£600
Legal fees	£800	£1,200
Total mortgage cost (5 years)	£60,825	£65,925
Additional company cost	—	£5,100

The limited company mortgage costs approximately £5,100 more over 5 years in this example. Now compare to the tax saving:

Tax comparison (higher-rate taxpayer at current income tax rates, rental income £36,000 pa, expenses £6,000 pa):

Item	Personal Name (5 years)	Limited Company (5 years)
Tax on rental profit	~£61,000	~£18,050
Section 24 credit	-£11,250	N/A
Net tax paid	~£49,750	~£18,050
Tax saving in company	~£31,700

The tax saving of approximately £31,700 over 5 years dwarfs the £5,100 additional mortgage cost. Even after extraction via dividends (which would add further tax), the company structure is significantly more efficient for a higher-rate taxpayer.

For your own calculations, use the HMO cashflow calculator with your actual figures.

For comprehensive rate guidance, see our HMO remortgage rates guide.

Sources

FAQs

What is the cheapest limited company HMO mortgage rate available?

As of early 2026, the most competitive limited company HMO mortgage rates start from approximately 4.8% for a 2-year fixed product at 65% LTV or below. These are typically available from mainstream BTL lenders for standard 6-bed HMOs with experienced landlord directors. Rates change frequently — check our live rate page for current data.

Why are limited company HMO rates higher than personal name?

Lenders face marginally higher costs and complexity with company lending — company searches, personal guarantee documentation, additional legal work, and slightly different risk profiles. The premium has narrowed significantly as competition has increased, and is now typically 0.3% to 0.5% rather than the 0.75% to 1.0% that was common several years ago.

Can I get a fixed rate limited company HMO mortgage?

Yes, and most company HMO mortgages are taken on fixed rates. Both 2-year and 5-year fixed products are widely available. 5-year fixes are the most popular choice for portfolio investors who want cashflow certainty. Some lenders also offer 3-year and 10-year fixed options, though these are less common.

Do limited company HMO rates vary by number of bedrooms?

Yes, materially. Standard HMO products (up to 6 beds) attract the most competitive rates. At 7–8 beds, you typically move into specialist lending with rates 0.25% to 0.5% higher. At 9+ beds, rates can be 1% or more above standard HMO products. The bed count affects which lenders will consider the case, which directly impacts the rate available.

Are there any lenders offering sub-5% limited company HMO rates?

Yes, but they are at the most competitive end of the market. Sub-5% company HMO rates are typically available only for properties with 6 or fewer beds, at 65% LTV or below, with experienced landlord directors. Products at this level may carry higher arrangement fees that offset the headline rate saving. Always compare total cost over the product term, not just the interest rate.