HMO stands for House in Multiple Occupation. It’s when you let out a property room-by-room to at least 3 tenants from different households, often students or professionals.
HMO Mortgage Types
HMO mortgages are specially designed for HMO investment properties. You can choose interest-only, favoured by landlords, or capital repayment like a residential mortgage.
You can also pick a fixed rate or variable/tracker rate. The interest rate may vary with the flexible options, but you aren’t locked in long-term.
HMO Mortgage Eligibility
Most lenders only offer HMO mortgages to experienced landlords who already have a rental property. There are some lenders that will work with first-time landlords, but criteria are strict.
When To Use An HMO Mortgage
An HMO mortgage is for a property let to 3+ people from separate households, like a group of friends or students.
Arranging An HMO Mortgage With JAG Funding Solutions
HMO mortgages are specialist products. As well as the mortgage, landlords have extra licensing and property standards to meet.
Our brokers fully understand HMO mortgage requirements and associated landlord responsibilities. We’ll guide you through the process from start to finish.
HMO v’s Buy-To-Let Mortgages
The main differences:
- HMO allows unconnected tenants, Buy To Let requires a family or standard tenancy
- More questions on experience and tenants for HMO applications
- HMO valuation and product fees are higher due to specialist nature
Other HMO Mortgage Considerations
Location is key – student areas deliver the best yields. Ensure you have the right council licences too.
Open communication between you, JAG Funding Solutions and the lender is vital for a smooth process.
