HMO Mortgages

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HMO Mortgages

Our MD Daniel Condren talks about HMO Mortgages. Watch below

What is an HMO mortgage?

HMO is a House of Multiple Occupancy, so an HMO Mortgage is borrowing on a property that has an HMO setup. It’s just like a Buy to Let, but is specifically designed for a property that’s got multiple occupancy, or separate rooms.


For example, A house with four or five rooms that accommodates young professionals, or student accommodation. It can provide a property investor an even greater return if they buy an HMO property, or convert one of their current portfolio properties. More rental can usually be achieved by renting per room, rather than as a full property. 

What are the different types of HMO mortgages?

Just as with standard Buy to Let mortgages, you can get a Repayment or Interest-only mortgage. With any type of mortgage available, predominantly lenders want you to be on a medium term Fixed-rate of around five years, due to the uncertainty surrounding brexit and the covid pandemic.

Who can get an HMO mortgage?

You might struggle to get an HMO mortgage if you’ve never owned a property and have no experience of property management or property investment. Typically lenders don’t tend to lend to First Time Buyers on HMO investments.

Would you start with a Buy to Let then go on to an HMO?

Typically you would start investing in property with a standard Buy to Let and ensure that you’re earning money from your rental first. A House of Multiple Occupation is a little bit more costly, but the reward that you would get is far greater. 


You also need to bear in mind the occupancy rate when you take on an HMO property, as students are only going to be there for a part of the year. HMOs offer a fantastic return, but the turnover of tenancancy is quite quick, so the investor will need to consider whether they want that kind of risk.


Can you have Buy to Let properties as well as HMO properties? 

You can have a mixture of everything. Taking on HMO properties is about maximising your return. If it’s in the right area and you attract the right type of tenant, for example, near hospitals, universities. There can be local authority restrictions on the number of HMO properties in a single postcode area, as they don’t want the area to become too saturated with one type of occupant, and attempt to retain a good balance of residents, so it’s worth doing research in your chosen location.

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When would you use an HMO Mortgage?

If you’re buying a property that’s already been separated into an HMO, you won’t be able to get a standard Buy to Let mortgage. You have to get the right type of mortgage to suit that type of investment. 

The disadvantage for investors is that the interest rates are higher and the criteria are different for an HMO mortgage. As well as an appropriate mortgage, you will also need appropriate permissions and to comply with all the regulations concerning HMO ownership, for example, licensing, gas safety, electrical certificate. Making sure that you’ve got the right type of protection as a Landlord is also important, so make sure you’ve got the right professionals looking after you.

How would you arrange an HMO Mortgage?

You can get in touch with us, here at One Mortgages and we would take care of the rest for you. Your requirements need to be exact, you need to be very clear of your end goal, as the broker will ask you about your plan. It’s quite straightforward really, especially if you’re dealing with an experienced broker.

How are HMO Mortgages different from Buy to Let Mortgages?

The major difference is the return on investment, as you can benefit from higher rental income when offering the property to multiple tenants.

Is there anything else to consider about HMO Mortgages?

You will need to consider the regulation, protecting the tenant by making sure that you’ve got the right type of tenancy agreements in place. You’ll need to make sure you have a trusted letting agent that knows the area you want to invest in. 

The borrowing is more expensive as the interest rates are higher, but it’s still a very very good opportunity and good return if you can get the right area, the right type of property, and the right tenant.

Give One Mortgage or give another reputable broker that’s credible, knowledgeable and experienced a call, and they should be able to talk you through the experience. A good broker should be able to help to understand how much money to invest in property and the best way to do it, but you’ve got to have the trust and the relationship with somebody who knows what they’re doing, so do your due diligence. 


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Based in Leeds, One Mortgages & Protection Limited offers impartial and unbiased advice to customers UK wide, no customer is too far away to help.

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Based in Leeds, One Mortgages & Protection Limited offers impartial and unbiased advice to customers UK wide, no customer is too far away to help.

Registered Office: One Group 1 Moorfield Chambers Moorfield Crescent Yeadon Leeds LS19 7EA

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