HMO Mortgages
- Expert Mortgage advice for Landlords
- I’ll aim to respond within 3 business hours
- Transparent and competitive advice fee of just £199 per application
The Financial Conduct Authority does not regulate some forms of Buy to Lets. Your property may be repossessed if you do not keep up repayments on your mortgage.
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I’ve worked with some of the UK’s largest landlords who have up to 110 properties in their portfolios
I’ve established and maintain relationships with the UK’s best specialist lenders to ensure applications progress smoothly and efficiently
You’ll have a dedicated advisor from start to finish and can stay updated via Whatsapp for quick and easy communication
Why Farnham Finance is the expert of choice for HMO mortgages
Having worked with some of the UK’s largest landlords with portfolios comprising up to 110 properties we’ve earned a strong reputation within the industry as a go-to advisor for landlords and property investors.
Over the years we’ve developed collaborative working relationships with UK lenders which prove invaluable when it comes to securing the most suitable deals for our clients.
I am proud to offer a transparent and competitive fixed fee of just £199 per application with no hidden charges. I offer competitive pricing without compromising on the exceptional quality of service you deserve. Expect nothing less than expert support every step of the way. I am able to offer such a low fee because I have no office costs and very low overheads and I pass those savings onto our loyal clients.
HMO mortgage FAQs
What’s the difference between an HMO mortgage and a buy to let mortgage?
The main difference between an HMO mortgage and a buy to let mortgage is the tenants. If your property will be let to 3 or more people from more than one household – meaning they are not related or a family unit – then you will need an HMO mortgage. For example, students, professionals and individuals who will have their own private bedrooms and share communal areas such as the kitchen and bathroom.
If you’re letting your property to a family or individuals who are letting the entire property together then you’ll need a buy to let mortgage.
What are the criteria for getting an HMO mortgage?
- Good credit history
- You’re a homeowner
- A deposit of at least 25%
- Rental income that covers 125% of the mortgage payments at a minimum
- The property must be in a location that has strong rental demand
- The property must be in good condition
Do you need previous experience to qualify for an HMO mortgage?
Most lenders prefer applicants to have prior experience managing buy to let properties. Some may require at least 12-24 months of experience as a landlord, especially for larger HMO properties. If you’re a first-time landlord you can still apply for an HMO mortgage, although you will likely have a highly restricted panel of lenders to choose from and face a higher interest rate. While previous landlord experience isn’t always an absolute requirement, it significantly increases your chances of qualifying for an HMO mortgage and obtaining more favorable terms.
Is an HMO mortgage more expensive?
A HMO mortgage is typically more expensive than a buy to let mortgage. Lenders consider HMOs to be riskier than buy to lets due to the complexity of managing multiple tenants, higher tenant turnover and stricter regulations. Lenders may also charge higher arrangement or setup fees for HMO mortgages due to the additional complexity involved in assessing the property and managing the risk.
Other costs to consider include:
- Legal fees
- HMO licensing fees
- Insurance policy
- Property maintenance and management costs
- Refinancing costs
Can I convert a standard buy to let property into an HMO and switch the mortgage?
Yes, it’s possible to convert a buy to let property into an HMO, however there are several considerations:
- Before you begin converting the property make sure it meets specific regulations, such as room size, fire safety and amenities. You may also need planning permission or a license from your local council.
- You’ll need to inform your current mortgage lender of your plans to convert the property into an HMO. Some lenders might allow the switch with their consent, but many will require you to remortgage to a dedicated HMO mortgage product. There may be an early repayment charge or exit fee associated with your current mortgage, depending on your agreement.
- You’ll also need to update your landlord insurance policy.
How do you compare HMO mortgages?
When sourcing the most suitable and affordable HMO mortgages for our clients we compare products from a panel of lenders. We determine the most suitable fit based on numerous factors including:
- Interest rate
- Loan-to-value
- Loan term
- Arrangement fees
- Rental income requirements
- Product features such as payment flexibility
- And much more
Will an HMO require a licence?
There are 2 types of HMO licence that are generally used for HMOs in the UK. Mandatory and Additional Licences. A mandatory licence is required where the HMO is occupied by 5 or more people living in 2 or more separate households. An additional licence is required by certain councils in certain areas where a property is shared by 3 or more people in 2 or more households.
In addition Councils can use Article 4 directions to control the amount of HMO properties in a certain area. These remove some permitted development rights and may mean that you need planning permission to rent out a property as an HMO.
Your home/property may be repossessed if you do not keep up repayments on your mortgage.
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Meet Robert Lewis-Crosby
