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The HMO Mortgage Broker
Large HMO Mortgages

Large HMO Profitability Calculator

Work out the monthly profit on an HMO with 7 or more lettable rooms.

This works out the profit on a large HMO after voids, bills, management, running costs and mortgage interest, and compares the rent with the higher rental cover some lenders ask for on 7+ room HMOs. It is an illustration from your own figures, not a lending decision or tax advice.

Your figures

For HMOs with 7 or more lettable rooms.

Income

Per calendar month

Allow for voids between tenants

Costs

Per month: energy, water, broadband, council tax

Of rent collected. Use 0% if you self-manage

Insurance, repairs, licence, compliance

Mortgage

Loan £450,000

Typical 5-year large HMO fixes: 4.6% to 7.2%

Ownership

Your results

Net monthly profit
£400
Net yield on value, before mortgage: 4.92%

A year

Gross rent
£52,800
Voids at 95% occupancy
−£2,640
Bills
−£9,600
Management
−£5,016
Other costs
−£6,000
Mortgage interest
−£24,750
Net annual profit
£4,794
Profit per room, a month
£50

Rental cover at a 5.5% stress rate: 213%. Some lenders ask for 145% from limited companies on large HMOs. This meets that level.

Before tax. Large HMOs usually need a mandatory HMO licence; add the licence fee and any compliance work to other costs.

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

How we calculate large HMO profitability

Methodology and data sources, updated October 2026

Formulas

Gross rent
Rooms × rent per room × 12

Rent with every room let all year.

Voids
Gross rent × (1 − occupancy %)

Rent lost while rooms are empty.

Bills and management
Bills = rooms × bills per room × 12; management = (gross rent − voids) × management %

Bills are counted for every room all year, as most whole-house bills continue when a room is empty. Management is charged on rent collected.

Mortgage interest
Property value × LTV × interest rate

Interest only.

Net monthly profit
(Gross rent − voids − bills − management − other costs − mortgage interest) ÷ 12

Before tax. Profit per room divides this by the number of rooms.

Net yield on value
(Gross rent − voids − bills − management − other costs) ÷ property value × 100

Before mortgage costs, so it can be compared across properties however they are financed.

Rental cover
Gross annual rent ÷ (loan × 5.5%) × 100

Some lenders ask for 145% from limited companies and 175% from individuals on large HMOs. Others ask less.

Data sources

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

Key assumptions

Default occupancyA neutral starting point. Use your own void history
95%
Default interest rateInterest only
5.5%
Default LTV
75%
Rental cover stress rate
5.5%
Large HMO rental cover, companySome lenders
145%
Large HMO rental cover, individualSome lenders
175%