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The HMO Mortgage Broker

Refurbishment HMO Mortgages

HMO Conversion Calculator

See how much cash stays in a buy, convert and refinance HMO project.

Enter what you pay for a house, the cost of converting it to an HMO and what you expect it to be worth once let, and this shows how much of your cash stays in the deal after a refinance. It is an illustration from your own figures, not a valuation or a lending decision.

Your figures

Buy a house, convert it to an HMO, then refinance on the finished value.

Purchase and works

Stamp duty, legal and survey fees

Building work, fire safety, fit-out and fees

After conversion

£3,300 a month in total

Your estimate. A lender's valuer sets the real figure

Loan £300,000

Bills, management, insurance, repairs, voids

Your results

Money left in the deal
£25,000
Return on cash left in: 56.4% a year
Total project cost
£325,000
Refinance loan
£300,000
Annual rent
£39,600
Gross yield on post-works value
9.90%
Mortgage interest at 5.5%
£16,500
Annual running costs
£9,000
Net annual income
£14,100

Rental cover at a 5.5% stress rate: 240%. Meets the 125% that lenders typically ask of limited company borrowers.

Planning permission (including any Article 4 direction), building regulations and HMO licensing can affect cost, timing and the finished value. Check with your local council before you buy. Bridging interest, refinance fees and tax are not included.

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

How we calculate HMO conversion returns

Methodology and data sources, updated October 2026

Formulas

Total project cost
Purchase price + purchase costs + conversion works

Everything you put in before the refinance. Bridging or development finance costs are not included.

Refinance loan
Post-works value × refinance LTV

The term loan on the finished HMO, based on the value you enter. The lender's valuer sets the real figure.

Money left in the deal
Total project cost − refinance loan

If the result is below zero, the refinance returns all of your cash plus the difference.

Net annual income
Rooms × rent per room × 12 − (refinance loan × pay rate) − annual running costs

Interest only at a 5.5% pay rate. No tax is deducted.

Return on cash left in
Net annual income ÷ money left in the deal × 100

Shown only when some cash stays in the deal.

Gross yield on post-works value
Annual rent ÷ post-works value × 100

Rent before any costs, as a share of the finished value.

Rental cover
Annual rent ÷ (refinance loan × 5.5%) × 100

Compared with a typical 125% limited company requirement. Lenders set their own test.

Data sources

  • Yes:Your own figures for price, costs, works, rent and post-works value
  • Yes:Typical specialist HMO lending criteria (loan to value, rental cover, stress rate), checked October 2026
  • Yes:Indicative HMO pay rates from our rates snapshot

Key assumptions

Refinance LTV defaultMost HMO lenders cap loans at this level
75%
Pay rate on refinanceInterest only
5.5%
Rental cover stress rate
5.5%
Rental cover requirementTypical for limited company borrowers
125%
OccupancyAllow for voids in your running costs
100%