Live HMO Mortgage Rates

Rates disclaimers: HMO mortgage rates change daily. We endeavour to maintain data accuracy where we can. Some products can be withdrawn without notice. Make sure to consult with a broker for up-to-date information.
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HMO Mortgage
The HMO Mortgage Broker | HMO Mortgage Rates

We’re working on this data as we speak.

The data displayed is for display purposes only & not accurate.
For live rate information, get a free quote

The HMO Mortgage Broker | HMO Mortgage Rates
2 year
Variable
Monthly
£6,218
APR
2.09%
Total Cost
£156,938
Fees
£10,000
The HMO Mortgage Broker | HMO Mortgage Rates
2 year
Variable
Monthly
£6,218
APR
2.09%
Total Cost
£156,938
Fees
£10,000
The HMO Mortgage Broker | HMO Mortgage Rates
2 year
Variable
Monthly
£6,218
APR
2.09%
Total Cost
£156,938
Fees
£10,000
The HMO Mortgage Broker | HMO Mortgage Rates
2 year
Variable
Monthly
£6,218
APR
2.09%
Total Cost
£156,938
Fees
£10,000
The HMO Mortgage Broker | HMO Mortgage Rates
2 year
Variable
Monthly
£6,218
APR
2.09%
Total Cost
£156,938
Fees
£10,000
The HMO Mortgage Broker | HMO Mortgage Rates
2 year
Variable
Monthly
£6,218
APR
2.09%
Total Cost
£156,938
Fees
£10,000
The HMO Mortgage Broker | HMO Mortgage Rates
2 year
Variable
Monthly
£6,218
APR
2.09%
Total Cost
£156,938
Fees
£10,000
The HMO Mortgage Broker | HMO Mortgage Rates
2 year
Variable
Monthly
£6,218
APR
2.09%
Total Cost
£156,938
Fees
£10,000

We do not guarantee the accuracy or availability of the rates displayed on our website. We encourage you to consult with a qualified professional to obtain personalised mortgage advice tailored to your specific needs and circumstances.

If the answer is yes then go for it. If not, then reconsider the options. If the answer is yes then go for it. If not, then reconsider the options. If the answer is yes then go for it. If not, then reconsider the options.

Get a HMO Mortgage quote, fast & 100% free.

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The HMO Mortgage Broker | HMO Mortgage Rates

HMO Mortgage Calculator

Looking for more help on HMO mortgage costs? Our HMO Mortgage Calculator is a valuable tool designed to help landlords and investors quickly estimate their potential monthly repayments on HMO properties. By inputting a few key details, users can gain insights into their financial commitments, assisting in effective budgeting and investment planning. Check out our free HMO mortgage calculator here.

HMO Mortgage Rate Data

HMO Mortgage Rate Data encompasses a variety of metrics and statistics that illuminate the current state and trends within the mortgage market for Houses in Multiple Occupation. This data may include average interest rates, which for HMO mortgages are often higher due to the increased risk presented by properties with multiple tenants.

It also covers loan-to-value ratios, indicative of the borrowing capacity against the property’s value, and stress test benchmarks, which assess a borrower’s ability to meet repayments under changing economic conditions. The data can further delve into the distribution of fixed versus variable rates among issued mortgages, showing preferences or shifts in the market.

Our HMO Mortgage Rate data

We obtain our HMO mortgage rate data from top mortgage data providers, ensuring our information is both up-to-date and comprehensive. These providers compile data from a broad spectrum of lenders, enabling us to deliver accurate and market-reflective rates. 

This approach allows landlords and investors to make informed decisions with confidence, supported by the latest insights from the mortgage industry.

Factors that influence HMO mortgage rates

HMO mortgage rates are influenced by a blend of individual and macroeconomic factors. Landlord experience and credit history play key roles, with proven track records in property management and financial stability often leading to better rates. 

The property’s quality and location impact risk assessment and potential income, affecting rates. Loan-to-value (LTV) ratios are crucial, with lower LTVs reducing lender risk and potentially lowering rates. 

On a wider scale, economic policies, interest rates set by central banks (e.g., the Bank of England), inflation, and overall economic health influence borrowing costs across the market. Regulatory changes and shifts in the housing market also impact the rates lenders offer. These personal and economic considerations together shape the mortgage landscape for HMO landlords.

HMO Mortgage Rate Types

For HMO (House in Multiple Occupation) mortgage rates, the choice between fixed, variable, tracker, discount, and offset rates involves a strategic decision based on your financial goals, risk tolerance, and the specific characteristics of your HMO property. 

Each type has unique advantages and potential drawbacks, particularly relevant in the context of HMO properties, which often involve more complex management and higher yields compared to traditional single-tenancy properties.

Fixed Rate Mortgages for HMOs:

These mortgages secure a fixed interest rate for a set period, typically ranging from 2 to 15 years. The main advantage for HMO landlords is budget certainty, which can be particularly valuable in managing multiple tenancies and associated costs. You’re protected from interest rate rises, ensuring stable, predictable payments, but you might miss out on savings if rates fall.

Variable Rate Mortgages for HMOs:

Unlike fixed rates, variable rate mortgages fluctuate, usually in line with the lender’s standard variable rate (SVR). This means monthly payments can increase or decrease. While there’s potential for lower payments if rates drop, there’s also the risk of rates increasing. For HMO landlords, this can mean less predictability in cash flow, which may affect profitability.

Tracker Rate Mortgages for HMOs:

These mortgages directly follow an external interest rate, typically the Bank of England base rate, plus a set margin. Your payments will change in line with this rate. This option can offer savings when external rates are low, but payments can quickly increase if the rate goes up. This requires HMO landlords to be financially prepared for variable costs.

Discount Rate Mortgages for HMOs:

Discount mortgages are a type of variable rate where you pay a reduced rate for a specific period, based on the lender’s SVR. For example, if the SVR is 5% and the discount is 1%, you pay 4%. This can offer initial savings, which can be appealing for HMO investments in the early years. However, since the SVR can vary, your rate isn’t fixed, introducing potential variability in your repayments.

Offset Mortgages for HMOs:

Offset mortgages link your mortgage to your savings account. Instead of earning interest on your savings, you’re charged less interest on your mortgage. This can effectively reduce the mortgage term or monthly payments, offering a flexible way to manage funds. For HMO landlords, this could mean using rental income and savings more efficiently, though the benefits strongly depend on your financial circumstances and the terms of the offset.

HMO Mortgage Payment Types

Interest-Only Mortgages for HMOs: With an interest-only mortgage, HMO landlords are required to pay only the interest on the loan each month, not the principal. This arrangement keeps monthly payments lower, which can be particularly advantageous for HMO properties where cash flow management is crucial due to the higher operational costs and maintenance demands associated with multiple tenancies. 

The principal amount remains unchanged and is due at the end of the mortgage term. This setup can benefit HMO landlords by maximizing rental income cash flow during the term of the loan. However, it requires a solid exit strategy to repay the principal at the term’s end, such as selling the property or refinancing.

Capital Repayment Mortgages for HMOs: Unlike interest-only mortgages, capital repayment plans for HMO properties involve monthly payments that cover both the loan’s interest and a portion of the principal. This gradually reduces the outstanding balance over the mortgage term. 

For HMO landlords, this means higher monthly outlays than with an interest-only mortgage, but it offers the advantage of building equity in the property. By the end of the mortgage term, the loan is fully paid off, which can be particularly appealing for long-term investment strategies. 

This mortgage type can offer peace of mind knowing the property will be entirely yours, debt-free, at the end of the term, albeit at the cost of higher monthly expenses.

HMO Mortgage FAQs

An HMO mortgage is a loan specifically designed for properties classified as Houses in Multiple Occupation, where three or more tenants form more than one household, sharing facilities like bathrooms and kitchens. These mortgages are tailored to landlords and investors looking to rent out such properties.

HMO mortgage rates are often slightly higher than standard mortgage rates due to the perceived increased risk associated with multiple tenancies, such as higher tenant turnover and more intensive property management.

Lenders consider several factors when setting HMO mortgage rates, including the borrower’s credit history, the property’s location and condition, rental yield, and the investor’s experience in managing rental properties.
Yes, fixed-rate HMO mortgages are available and offer the benefit of predictable monthly payments for the fixed term, which can appeal to new investors.
Variable-rate mortgages for HMOs fluctuate with the lender’s standard variable rate or track an external rate like the Bank of England’s base rate, meaning monthly payments can vary over time.
Eligibility criteria can include a minimum personal income, a good credit score, prior experience as a landlord, and the property meeting certain safety and habitability standards.
Typically, lenders require a larger deposit for HMO mortgages compared to standard residential mortgages, often ranging from 25% to 30% of the property’s value.
Applicants may face various fees, including arrangement fees, valuation fees, and legal costs. These fees can vary widely between lenders.
Yes, refinancing an HMO mortgage can allow investors to secure a lower interest rate, change loan terms, or release equity from the property.
Researching and comparing offers from multiple lenders or working with a mortgage broker who specializes in HMO properties can help find the best rates.
A higher rental yield can make an HMO property more appealing to lenders, as it suggests the investment is likely to generate sufficient income to cover mortgage payments and operational costs.
While it’s possible, first-time landlords may face stricter criteria and higher rates due to their lack of experience managing rental properties.
Risks include potential for higher tenant turnover, more complex management requirements, and stricter regulatory compliance compared to single-tenancy properties.

Properties in areas with strong rental demand and higher property values might secure more favorable mortgage rates due to the perceived lower risk.

Landlords will need buildings insurance at a minimum, and may also require contents insurance, liability insurance, and rent guarantee insurance.
The application process can take anywhere from a few weeks to several months, depending on the lender’s requirements and the complexity of the property.
Yes, but the remaining lease term will be a crucial factor in the lender’s decision-making process, with most requiring at least 70 years remaining.
Required documents typically include proof of income, ID, bank statements, details of any current mortgages, and the HMO license if the property requires one.
Economic shifts, like changes in the base rate set by the Bank of England, can influence interest rates across the board, including those for HMO mortgages.
Locking in a fixed-rate mortgage can protect against rate increases in the short term, while building a cash reserve can help buffer against future rate hikes or unexpected expenses.

Advertiser Disclosure

Please note that the mortgage rates and information displayed on our website are for informational purposes only and may not be accurate or up-to-date.

It is important to verify the rates with a licensed mortgage broker, lender, or financial institution before making any financial decisions. Rates can vary based on various factors including creditworthiness, loan amount, and market conditions.

We do not guarantee the accuracy or availability of the rates displayed on our website. We encourage you to consult with a qualified professional to obtain personalised mortgage advice tailored to your specific needs and circumstances.

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FAQs

Do I need an HMO Mortgage?

If the answer is yes then go for it. If not, then reconsider the options. If the answer is yes then go for it. If not, then reconsider the options. If the answer is yes then go for it. If not, then reconsider the options.

If the answer is yes then go for it. If not, then reconsider the options. If the answer is yes then go for it. If not, then reconsider the options. If the answer is yes then go for it. If not, then reconsider the options.
If the answer is yes then go for it. If not, then reconsider the options. If the answer is yes then go for it. If not, then reconsider the options. If the answer is yes then go for it. If not, then reconsider the options.
If the answer is yes then go for it. If not, then reconsider the options. If the answer is yes then go for it. If not, then reconsider the options. If the answer is yes then go for it. If not, then reconsider the options.
If the answer is yes then go for it. If not, then reconsider the options. If the answer is yes then go for it. If not, then reconsider the options. If the answer is yes then go for it. If not, then reconsider the options.
If the answer is yes then go for it. If not, then reconsider the options. If the answer is yes then go for it. If not, then reconsider the options. If the answer is yes then go for it. If not, then reconsider the options.

Advertiser Disclosure

Please note that the mortgage rates and information displayed on our website are for informational purposes only and may not be accurate or up-to-date.

It is important to verify the rates with a licensed mortgage broker, lender, or financial institution before making any financial decisions. Rates can vary based on various factors including creditworthiness, loan amount, and market conditions.

We do not guarantee the accuracy or availability of the rates displayed on our website. We encourage you to consult with a qualified professional to obtain personalised mortgage advice tailored to your specific needs and circumstances.