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HMO mortgages versus regular mortgages

HMO mortgages are very different compared to regular mortgages, HMO are houses of multiple occupancy, so you would rent them room by room, often getting higher yields than residential letting.

What you need to know about HMO Mortgages

In this type of commercial mortgage, a single dwelling is split into multiple units which are rented out to separate tenants. This can be a great way to get all the benefits of homeownership without having to shell out for a large mortgage.

It’s essential that you understand exactly what a HMO mortgage is before applying for one. They’re one of the most advantageous types of home loans available, and they may be applied for by anyone who has sufficient equity in their property (usually 25% equity).

When being considered for a mortgage for multiple occupation, HMO lenders do prefer experienced HMO landlords , but we our commercial mortgage team are able to work with get mortgages for first time HMO landlords

What can HMO mortgages be used for?

HMO mortgages can be used for:

  • Student accommodation
  • Young professional accommodation
  • Worker accommodation

It is generally a lower monthly cost per room, however the total rent for all rooms may be higher than renting to a single person.

Even though HMO mortgages are more common among experienced landlords rather than first-time landlords, the extra risks include a higher tenant turnover and several tenant concerns, as well as a single family.

Landlords often take advantage of HMO mortgages issued by a limited company for their tax efficiency.

To speak to a member of our team about HMO Mortgages, please contact us today

Get in touch with a member of our team to start your help to buy mortgage enquiry

What can commercial buy to let’s be used for?

Most commonly used by landlords, homeowners and property developers to: