Fee Guide

HMO Mortgage Fees & Costs

Complete guide to all fees and costs associated with HMO mortgages, from arrangement fees to legal costs. Understand what you'll pay and when.

Understanding HMO Mortgage Fees

When securing an HMO mortgage, you'll encounter various fees throughout the process. Some are one-time charges, while others are ongoing. Understanding these fees helps you budget effectively and compare different mortgage products.

Application Fee

£100–£500

Paid to: Lender

Due: On application

Sometimes charged separately from booking or arrangement fees. Non-refundable and covers initial processing.

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Application Fee

Paid to: Lender

£100–£500

Due: On application

Sometimes charged separately from booking or arrangement fees. Non-refundable and covers initial processing.

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Arrangement Fee

£995–£2,000 or 1–2%

Paid to: Lender

Due: On completion

The main fee for setting up your HMO mortgage. Can often be added to the loan. Some lenders offer fee-free products but with higher interest rates.

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Arrangement Fee

Paid to: Lender

£995–£2,000 or 1–2%

Due: On completion

The main fee for setting up your HMO mortgage. Can often be added to the loan. Some lenders offer fee-free products but with higher interest rates.

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Arrears Fee

£25–£50 per missed payment

Paid to: Lender

Due: On arrears

Charged if you fall behind on payments. Can add up if not resolved quickly.

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Arrears Fee

Paid to: Lender

£25–£50 per missed payment

Due: On arrears

Charged if you fall behind on payments. Can add up if not resolved quickly.

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Booking Fee

£100–£250

Paid to: Lender

Due: On application

Non-refundable fee to secure a mortgage product. Sometimes included in the arrangement fee. May be waived for certain products or clients.

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Booking Fee

Paid to: Lender

£100–£250

Due: On application

Non-refundable fee to secure a mortgage product. Sometimes included in the arrangement fee. May be waived for certain products or clients.

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Broker Fee

£0–£1,000

Paid to: Broker

Due: On application

Fee for finding and arranging your mortgage. Many brokers don't charge this as they receive commission from lenders. Always check if this is included.

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Broker Fee

Paid to: Broker

£0–£1,000

Due: On application

Fee for finding and arranging your mortgage. Many brokers don't charge this as they receive commission from lenders. Always check if this is included.

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Build Cost Breakdown/Contingency

5–10% of build cost

Paid to: Lender/Surveyor

Due: During project

A contingency buffer required for development projects, typically 5–10% of total build costs.

HMO Development Finance

Build Cost Breakdown/Contingency

Paid to: Lender/Surveyor

5–10% of build cost

Due: During project

A contingency buffer required for development projects, typically 5–10% of total build costs.

HMO Development Finance

CHAPS/Bank Transfer Fee

£20–£50

Paid to: Lender

Due: On completion

Fee for transferring funds via CHAPS or similar bank transfer. Sometimes listed separately from telegraphic transfer.

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CHAPS/Bank Transfer Fee

Paid to: Lender

£20–£50

Due: On completion

Fee for transferring funds via CHAPS or similar bank transfer. Sometimes listed separately from telegraphic transfer.

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Consent to Let Fee

£50–£150

Paid to: Lender

Due: On application

If you change the use of the property (e.g., from residential to HMO), some lenders charge this fee.

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Consent to Let Fee

Paid to: Lender

£50–£150

Due: On application

If you change the use of the property (e.g., from residential to HMO), some lenders charge this fee.

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Deed Release/Discharge Fee

£50–£200

Paid to: Lender

Due: On redemption

Sometimes listed separately from exit/admin fee. Charged for releasing the legal charge on the property.

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Deed Release/Discharge Fee

Paid to: Lender

£50–£200

Due: On redemption

Sometimes listed separately from exit/admin fee. Charged for releasing the legal charge on the property.

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Default/Collection Fee

Varies

Paid to: Lender

Due: On default

For missed payments or collections. Covers lender's costs in pursuing arrears.

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Default/Collection Fee

Paid to: Lender

Varies

Due: On default

For missed payments or collections. Covers lender's costs in pursuing arrears.

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Development Monitoring Fee

Varies

Paid to: Lender/Surveyor

Due: During project

Covers the cost of monitoring the progress of a development project. Applies to development finance.

HMO Development Finance

Development Monitoring Fee

Paid to: Lender/Surveyor

Varies

Due: During project

Covers the cost of monitoring the progress of a development project. Applies to development finance.

HMO Development Finance

Drawdown Fee

Varies

Paid to: Lender

Due: On each drawdown

Fee charged each time funds are released during a development project. Applies to development finance.

HMO Development Finance

Drawdown Fee

Paid to: Lender

Varies

Due: On each drawdown

Fee charged each time funds are released during a development project. Applies to development finance.

HMO Development Finance

Early Repayment Charge

1–5% of balance

Paid to: Lender

Due: On repayment

Penalty for repaying the mortgage early. Varies by lender and product. Usually applies during fixed-rate periods. Some products have no ERC.

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Early Repayment Charge

Paid to: Lender

1–5% of balance

Due: On repayment

Penalty for repaying the mortgage early. Varies by lender and product. Usually applies during fixed-rate periods. Some products have no ERC.

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Exit Fee

£100–£300

Paid to: Lender

Due: On completion

Admin fee for closing the loan. Sometimes called a 'deed release fee'. Not all lenders charge this. Can be negotiated in some cases.

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Exit Fee

Paid to: Lender

£100–£300

Due: On completion

Admin fee for closing the loan. Sometimes called a 'deed release fee'. Not all lenders charge this. Can be negotiated in some cases.

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Higher Lending Charge

1.5–7.5% of loan

Paid to: Lender

Due: On completion

May apply if borrowing more than 75% of property value. Acts as insurance for the lender. Can often be added to the loan amount.

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Higher Lending Charge

Paid to: Lender

1.5–7.5% of loan

Due: On completion

May apply if borrowing more than 75% of property value. Acts as insurance for the lender. Can often be added to the loan amount.

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Insurance Arrangement Fee

£0–£100

Paid to: Lender/Insurer

Due: On insurance setup

If the lender arranges insurance on your behalf, a fee may apply.

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Insurance Arrangement Fee

Paid to: Lender/Insurer

£0–£100

Due: On insurance setup

If the lender arranges insurance on your behalf, a fee may apply.

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Legal Fee

£500–£1,500

Paid to: Solicitor

Due: On completion

Legal work for the mortgage. Higher for complex HMO properties. Includes property checks, title verification, and mortgage deed preparation.

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Legal Fee

Paid to: Solicitor

£500–£1,500

Due: On completion

Legal work for the mortgage. Higher for complex HMO properties. Includes property checks, title verification, and mortgage deed preparation.

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Mortgage Account Fee

£0–£300

Paid to: Lender

Due: Annually

Annual fee for managing your mortgage account. Not all lenders charge this. Sometimes included in the interest rate.

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Mortgage Account Fee

Paid to: Lender

£0–£300

Due: Annually

Annual fee for managing your mortgage account. Not all lenders charge this. Sometimes included in the interest rate.

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Product Switch Fee

£0–£500

Paid to: Lender

Due: On switching

If you switch to a new product with the same lender, a fee may apply.

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Product Switch Fee

Paid to: Lender

£0–£500

Due: On switching

If you switch to a new product with the same lender, a fee may apply.

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Property Inspection Fee

£150–£300

Paid to: Lender

Due: On application

Specific to HMO properties. Covers the cost of inspecting the property to ensure it meets HMO standards and lender requirements.

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Property Inspection Fee

Paid to: Lender

£150–£300

Due: On application

Specific to HMO properties. Covers the cost of inspecting the property to ensure it meets HMO standards and lender requirements.

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Property Management Fee

8–15% of rent

Paid to: Property Manager

Due: Monthly

If using a property manager for your HMO. Covers tenant management, maintenance coordination, and rent collection. Optional but recommended for HMOs.

Property Management Fee

Paid to: Property Manager

8–15% of rent

Due: Monthly

If using a property manager for your HMO. Covers tenant management, maintenance coordination, and rent collection. Optional but recommended for HMOs.

Re-inspection Fee

£100–£300

Paid to: Lender/Surveyor

Due: On re-inspection

Charged if a property needs to be re-inspected after works or to release retention.

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Re-inspection Fee

Paid to: Lender/Surveyor

£100–£300

Due: On re-inspection

Charged if a property needs to be re-inspected after works or to release retention.

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Retention Fee

Varies

Paid to: Lender

Due: On completion/works

If the lender holds back part of the loan until works are completed. Applies to some bridging and dev finance.

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Retention Fee

Paid to: Lender

Varies

Due: On completion/works

If the lender holds back part of the loan until works are completed. Applies to some bridging and dev finance.

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Surveyor/Valuer Travel Fee

£50–£200

Paid to: Surveyor/Valuer

Due: On inspection

If the property is in a remote location, additional travel costs may be charged.

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Surveyor/Valuer Travel Fee

Paid to: Surveyor/Valuer

£50–£200

Due: On inspection

If the property is in a remote location, additional travel costs may be charged.

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Telegraphic Transfer Fee

£20–£50

Paid to: Lender

Due: On completion

Fee for transferring mortgage funds to your solicitor. Some lenders include this in other fees. Always check if this is included.

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Telegraphic Transfer Fee

Paid to: Lender

£20–£50

Due: On completion

Fee for transferring mortgage funds to your solicitor. Some lenders include this in other fees. Always check if this is included.

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Title Indemnity Insurance

£50–£500

Paid to: Solicitor/Insurer

Due: On completion

Sometimes required for legal/title issues. Protects against specific title defects.

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Title Indemnity Insurance

Paid to: Solicitor/Insurer

£50–£500

Due: On completion

Sometimes required for legal/title issues. Protects against specific title defects.

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Valuation Fee

£250–£1,000

Paid to: Lender

Due: On application

Covers the cost of valuing your HMO property. Higher for larger properties. Some lenders offer free basic valuations but charge for detailed ones.

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Valuation Fee

Paid to: Lender

£250–£1,000

Due: On application

Covers the cost of valuing your HMO property. Higher for larger properties. Some lenders offer free basic valuations but charge for detailed ones.

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Tips for Managing HMO Mortgage Fees

Always ask if fees can be added to the loan amount
Compare total costs, not just individual fees
Check if any fees can be waived or reduced
Consider fee-free products if available
Budget for both upfront and ongoing fees

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