Large HMO Mortgage

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What Is A Large HMO Mortgage?

Many HMO lenders cap their max lending somewhere between £500,000 and £1m. There is no set rule for loans classed as a larger HMO mortgage but realistically £1m and above is the larger end of the scale.

Also, properties with eight or more letting rooms may be considered large meaning a specialist lender will be needed. We have lenders with no maximum loan size if the application meets affordability criteria and the LTV (Loan to Value) falls within lender limits.

Read on below to find out more or fill in the form to talk to an expert.

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Latest HMO Mortgage Offers

View some of the latest Large HMO mortgage offers from leading lenders.

Product HM0008 - Apply Now
Interest Rate
2.85%
Type
tracker
Revert to Rate
2.85%
Lender Fee
1.50%
Max LTV
70%
Max Bedrooms
No Max
Loan Size
£1,000,000 - No max
Applicant Type
Sole/Ltd Co.
First Time Landlord
Yes
Product HM0020 - Apply Now
Interest Rate
3.64%
Type
2 year fixed
Revert to Rate
5.99%
Lender Fee
£1,999
Max LTV
60%
Max Bedrooms
No Max
Loan Size
None - £750,000
Applicant Type
Sole name only
First Time Landlord
No
Product HM0033 - Apply Now
Interest Rate
4.10%
Type
variable
Revert to Rate
4.10%
Lender Fee
1.20%
Max LTV
65%
Max Bedrooms
No Max
Loan Size
£1,000,000 - No max
Applicant Type
Sole/Ltd Co.
First Time Landlord
No
CLICK HERE TO COMPARE MORE MARKET LEADING PRODUCTS

Large HMO Property

An HMO property is thought to be large if it has six or more tenants forming more than one household. If you’re thinking of buying this type of property, you will need to look at more specialist HMO Mortgages.

Some specialist lenders do not put a limit on the number of bedrooms allowed, they will simply take a view on the application. They will mainly look at the client’s experience in letting HMO property, the property itself, location and the rental value.

We also deal with lenders who are willing to consider any kind of property. If the building is suitable, these lenders do not have a maximum number of bedrooms allowed.

A building such as a pub converted to an HMO could be considered large simply due to the type of property. It would be unusual for a first-time landlord to be considered for a large HMO mortgage, but not impossible. As a larger HMO would be harder to manage, a managing agent could be useful.

Things To Consider

Here are a few things to take into consideration when looking to apply for an HMO mortgage – for more information you can contact our team of experts either online or by calling 01922 620008.

  • What are your timescales?
    Assuming the valuation and legal work doesn’t take any longer to complete, the timescales from full application to completion will be the same.
  • Do you have lettings experience?
    These types of properties are not really suited to first-time landlords. If you let a larger HMO to a company, you should be aware that if they cancel the tenancy and rent ceases, the mortgage still must be repaid.
  • Is property size an issue?
    We deal with lenders who are willing to consider any kind of property. If the building is suitable, these lenders do not have a maximum number of bedrooms allowed.

Which Lenders Will Fund Large HMO Mortgages?

For larger and more complex properties, your application will usually best be managed through a specialist lender, or even a commercial mortgage lender.

These lenders will usually take a common-sense approach to assessing each application and look at the bigger picture. As such, you will benefit from more flexible criteria than you would usually expect on smaller, simpler properties.

What Experience is Needed to Qualify for a Large HMO Mortgage?

As with any finance application, the lender will want to ensure that you will be able to maintain the monthly repayments. As such, the lender will look for details that prove your ability to manage the property that you’re looking to take on.

For refinance applications, the lender will usually be satisfied that you are already managing the property – where it is being well managed.

Experience doesn’t necessarily have to be management of HMOs, it could be commercial investment property, or a portfolio of residential buy to lets.

Who Can Apply?

We can fund applications for clients with diverse backgrounds and almost any current circumstances. We can accept applications from the following:

  • Individuals
  • Partnerships
  • Ltd companies
  • Expats
  • Overseas applicants looking to invest in the UK property market
about-the-author-lee-hemming

About The Author

Lee has built a wealth of knowledge and expertise within the commercial finance sector and has sat on the family management team since 2007. His knowledge of the complex residential investment market led to our growth in the HMO and commercial property investment markets. Lee combines his work on HMO and complex investment properties alongside his work in the bridging loan, commercial mortgage and development finance markets.

Lee Hemming CeMAP  -  
Sales Director

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