What is an HMO mortgage?

An HMO (House in Multiple Occupation) mortgage is a specialist loan for properties rented to multiple tenants who aren’t from the same family or household. Typically, this means at least three tenants who share facilities like a bathroom, kitchen or toilet. HMO properties are especially popular in areas with high tenant demand, like those near universities or in busy cities.

But getting the right mortgage is key. Standard buy-to-let mortgages often aren’t suitable for HMO properties, which usually involve multiple tenancies, stricter licensing rules, and more complex layouts. Specialist HMO mortgages are tailored to handle the additional risks and requirements that come with these types of lets.

Lenders offering HMO mortgages tend to assess applications differently. They might look at your experience as a landlord, the rental income potential across several rooms, and whether the property meets local HMO regulations. With the right mortgage, you’ll be better placed to unlock the full earning potential of your HMO investment.

Are you eligible for an HMO mortgage?

While lenders typically prefer applicants with previous landlord experience, others are open to working with new landlords. However, be prepared: the criteria can be stricter, and the process might involve more paperwork.

To apply for an HMO mortgage, you may need to meet the following criteria:

Experience/income

Some lenders require you to already be a property owner and have at least 12 months’ experience as an HMO landlord. Others might stipulate that first-time landlords must have a minimum income to apply.

Adequate deposit

Some require a deposit of at least 25%.

Licensing

Sometimes there are extra regulatory things that an HMO landlord has to do, in terms of licensing requirements and checks of the property.

Solid credit history

A solid credit score can work in your favour.

Every lender’s a bit different, so it’s very important to compare your options to find the right fit for your situation. Ready to take the plunge? With the right preparation, your HMO investment could be just around the corner!

Do remember… your property could be repossessed if you don’t keep up repayments on your mortgage, so make sure you’re comfortable with what you can afford before taking the plunge.

What costs should I budget for when arranging a mortgage?

When applying for a mortgage, remember there are a few costs you’ll need to keep in mind to avoid any surprises:

  • Valuation fees: Lenders will want to know your property's value, so they'll arrange a valuation. Costs can vary, but it's wise to budget for this.​

  • Legal fees: Whether it's a solicitor or conveyancer, you'll need legal help to navigate the process.​ Legal fees for home buying are typically around £2,000 (including VAT at 20%), but the exact cost can vary depending on the property and how complex the work is.

  • Local searches: If you’re buying a property, your solicitor will also carry out local searches.

  • Arrangement fees: Lenders usually charge a fee to set up your mortgage.

  • Early repayment charges (ERCs): Planning to pay off your mortgage early? Be aware of potential ERCs, which can apply if you overpay beyond a certain limit.

  • Survey costs: If you're considering a detailed property survey, this will be an additional expense to keep in mind.​

Mortgage guides

Answering your questions about HMO mortgages

Page updated on 11th September 2025, Reviewed by Richard Groom