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The HMO Mortgage Broker

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
When:
On application

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

HMO MortgagesHMO RemortgagesHMO BridgingHMO Development Finance

Arrangement Fee£995–£2,000 or 1–2%
Paid to:
Lender
When:
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.

HMO MortgagesHMO RemortgagesHMO BridgingHMO Development Finance

Arrears Fee£25–£50 per missed payment
Paid to:
Lender
When:
On arrears

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

HMO MortgagesHMO RemortgagesHMO BridgingHMO Development Finance

Booking Fee£100–£250
Paid to:
Lender
When:
On application

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

HMO MortgagesHMO Remortgages

Broker Fee£0–£1,000
Paid to:
Broker
When:
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.

HMO MortgagesHMO RemortgagesHMO BridgingHMO Development Finance

Build Cost Breakdown/Contingency5–10% of build cost
Paid to:
Lender/Surveyor
When:
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
When:
On completion

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

HMO MortgagesHMO RemortgagesHMO BridgingHMO Development Finance

Consent to Let Fee£50–£150
Paid to:
Lender
When:
On application

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

HMO MortgagesHMO Remortgages

Deed Release/Discharge Fee£50–£200
Paid to:
Lender
When:
On redemption

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

HMO MortgagesHMO RemortgagesHMO BridgingHMO Development Finance

Default/Collection FeeVaries
Paid to:
Lender
When:
On default

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

HMO MortgagesHMO RemortgagesHMO BridgingHMO Development Finance

Development Monitoring FeeVaries
Paid to:
Lender/Surveyor
When:
During project

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

HMO Development Finance

Drawdown FeeVaries
Paid to:
Lender
When:
On each drawdown

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

HMO Development Finance

Early Repayment Charge1–5% of balance
Paid to:
Lender
When:
On repayment

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

HMO MortgagesHMO Remortgages

Exit Fee£100–£300
Paid to:
Lender
When:
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.

HMO MortgagesHMO RemortgagesHMO BridgingHMO Development Finance

Higher Lending Charge1.5–7.5% of loan
Paid to:
Lender
When:
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.

HMO MortgagesHMO Remortgages

Insurance Arrangement Fee£0–£100
Paid to:
Lender/Insurer
When:
On insurance setup

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

HMO MortgagesHMO RemortgagesHMO BridgingHMO Development Finance

Legal Fee£500–£1,500
Paid to:
Solicitor
When:
On completion

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

HMO MortgagesHMO RemortgagesHMO BridgingHMO Development Finance

Mortgage Account Fee£0–£300
Paid to:
Lender
When:
Annually

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

HMO MortgagesHMO Remortgages

Product Switch Fee£0–£500
Paid to:
Lender
When:
On switching

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

HMO MortgagesHMO Remortgages

Property Inspection Fee£150–£300
Paid to:
Lender
When:
On application

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

HMO MortgagesHMO RemortgagesHMO BridgingHMO Development Finance

Property Management Fee8–15% of rent
Paid to:
Property Manager
When:
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
When:
On re-inspection

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

HMO MortgagesHMO RemortgagesHMO BridgingHMO Development Finance

Retention FeeVaries
Paid to:
Lender
When:
On completion/works

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

HMO BridgingHMO Development Finance

Surveyor/Valuer Travel Fee£50–£200
Paid to:
Surveyor/Valuer
When:
On inspection

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

HMO MortgagesHMO RemortgagesHMO BridgingHMO Development Finance

Telegraphic Transfer Fee£20–£50
Paid to:
Lender
When:
On completion

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

HMO MortgagesHMO RemortgagesHMO BridgingHMO Development Finance

Title Indemnity Insurance£50–£500
Paid to:
Solicitor/Insurer
When:
On completion

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

HMO MortgagesHMO RemortgagesHMO BridgingHMO Development Finance

Valuation Fee£250–£1,000
Paid to:
Lender
When:
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.

HMO MortgagesHMO RemortgagesHMO BridgingHMO Development Finance