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Buy to Let HMO Mortgages

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Buy to Let HMO Mortgages

Buy to let HMO mortgages are designed specifically for a House in Multiple Occupation (HMO). If you want to finance a property to let to 3 or more people, you’ll need a buy to let HMO mortgage.

As experienced mortgage brokers with decades of experience, the GPS Financial team can help arrange competitive finance for HMO property purchases.

We’re with you every step of the way and can handle the paperwork necessary to secure competitive buy-to-let HMO mortgages from reliable lenders.

What is a Buy to Let HMO Mortgage?

A buy to let HMO mortgage is similar to a standard buy to let mortgage, but is designed to manage the higher risk and specific lending criteria for HMOs.

As HMOs tend to have a higher turnover of tenants and different building configurations than usual, they are regarded as higher risk. That requires a specialist mortgage.

How do Buy to Let HMO Mortgages work?

HMO mortgages work in a similar way to buy to let mortgages but are usually interest only.

The mortgage will be secured on the property and the rental income must exceed the mortgage payment by at least 25%.

The mortgage has the standard personal qualifying criteria such as income, debt, affordability and credit score.

It will also have additional criteria based on rental income, property type and other specific criteria for HMO – we’ll explain that more in a minute.

When do I need an HMO Buy to Let Mortgage?

If you’re planning to buy a property to let to 3 or more people at once, you’ll need a buy to let HMO mortgage.

You won’t get a standard buy to let mortgage on an HMO due to the higher risk involved with this type of property. If you buy a standard property with a buy to let mortgage and turn it into an HMO, you may be contravening your mortgage contract and the lender may recall the loan.

We always recommend using the right product for the purpose and will help you every step of the way.

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Can I get an HMO Buy to Let Mortgage?

You may be able to secure an HMO buy to let mortgage if you can pass the qualifying criteria and mortgage stress test.

You’ll need to pass buy to let mortgage lending criteria and the building you’re planning to buy will need to pass HMO lending criteria.

Each lender is different, but typical criteria includes:

  • Minimum property value of between £25,000
  • Maximum LTV of 80%
  • No minimum rent
  • First time landlord available
  • Unlimited Bedrooms
  • No minimum income


A mortgage stress test is what will decide how much you can borrow with an HMO buy to let mortgage.

The stress test is in two parts, the annual interest test and rental income test.

The annual interest test uses Interest Cover Ratio to determine how much interest you’ll pay each year to ensure you can afford repayments at the proposed rate of interest.

The rental income test will calculate the Rental Cover Rate to make sure your projected income will cover repayments. It will need to be at least 125% of your mortgage payment.

GPS Financial can help with every aspect of HMO buy to let mortgage qualification. Get in touch with one of our specialist mortgage advisors for assistance.

What HMO Mortgage rates can you expect?

Due to the risk involved to the lender, HMO mortgage rates tend to be higher than standard buy to let rates.

They will also include setup fees and sometimes other fees too, depending on the lender and other considerations.

Typical mortgages will be 2 or 5 year fixes but there are standard variable and tracker mortgages for HMOs too.

GPS Financial works with a wide pool of reputable lenders to source fair and competitive rates for you.

How to get a Buy to Let Mortgage for your HMO

The easiest way to get a buy to let mortgage for your HMO is to work with a specialist mortgage broker such as GPS Financial.

As experienced mortgage brokers, we have the skills and expertise to identify and secure competitive mortgages for any property requirement, including Houses in Multiple Occupation.

We handle the paperwork and help with qualifying criteria, affordability tests and every element or your mortgage application to support you in your investment.

Contact GPS Financial today for a free consultation.

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