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The HMO Mortgage Broker
First Time Landlord HMO Mortgages

First-Time Landlord Calculator

Monthly cashflow and upfront costs for your first HMO

This brings the main numbers for a first HMO into one place: monthly cashflow on an interest-only mortgage, the cash needed upfront including stamp duty, and rental cover. It is an illustration, not a lending decision or tax advice.

Your figures

All rooms together, before costs

£87,500 deposit · £262,500 loan

Interest-only mortgage

Bills, council tax, insurance, repairs, management, voids

As a % of the loan, paid upfront

Do you already own a home?

Your results

Monthly cashflow
£1,207
Cash needed upfront: £117,750

Each month

Rent
£3,250
Mortgage interest at 5.5%
-£1,203
Running costs
-£840
Cashflow
£1,207

Upfront

Deposit (25%)
£87,500
Stamp duty
£25,000
Arrangement fee (2%)
£5,250
Cash needed
£117,750
Loan
£262,500

Rental cover 270% at a 5.5% stress rate. That meets the 125% many lenders typically ask of basic-rate taxpayers.

Some lenders ask for previous letting experience before lending on an HMO. A specialist can find those that consider new landlords.

Cashflow is before tax. Stamp duty uses England and Northern Ireland rates from 1 April 2025, with the 5% surcharge for additional homes. Cash upfront leaves out legal, valuation and survey costs, and any licensing or refurbishment spend.

Illustrative figures only, based on the numbers you enter. Not a mortgage offer.

How we calculate First-Time Landlord Figures

Methodology and data sources, updated October 2026

Formulas

Loan
Purchase price − (Purchase price × Deposit % ÷ 100)

The mortgage after your deposit.

Monthly cashflow
Monthly rent − (Loan × Interest rate % ÷ 100 ÷ 12) − Monthly running costs

What is left each month after an interest-only mortgage and the running costs you enter, before tax.

Stamp duty
Sum over bands of (slice of price in band × (band rate + 5% if you already own a home))

England and Northern Ireland rates from 1 April 2025: 0% to £125,000, 2% to £250,000, 5% to £925,000, 10% to £1.5m, 12% above. The same band maths as our stamp duty calculator.

Cash needed upfront
Deposit + Stamp duty + (Loan × Arrangement fee % ÷ 100)

The main sums due on completion.

Rental cover
(Monthly rent × 12) ÷ (Loan × 5.5% stress rate) × 100

Compared with the 125% many lenders typically ask of basic-rate taxpayers.

Data sources

  • Yes:HMRC Stamp Duty Land Tax residential rates from 1 April 2025, including the 5% higher rates for additional dwellings
  • Yes:Typical specialist HMO lending criteria (rental cover, stress rate, pay rate, arrangement fee), checked October 2026
  • Yes:Our HMO rate book (data/rates-snapshot.ts) for the typical 5-year pay rate
  • Yes:Our first-time landlord HMO mortgage guide

Key assumptions

DepositMost HMO lenders cap loans at 75% of the value
25%
Interest rateInterest only
5.5%
Arrangement feePaid upfront, not added to the loan
2% of the loan
Stress rate for rental cover
5.5%
Rental cover benchmarkBasic-rate taxpayer; higher-rate taxpayers often need more
125%
Stamp duty surchargeApplied when you already own a home. Companies pay it whether or not you do
5%
Running costsStarts at £840 a month, the same as our cashflow calculator
As entered
Not includedAlso licensing and refurbishment costs
Tax, legal and survey fees