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A UK independent buy to let & HMO mortgage broker with access to all products in the market

Online since 2004, we're a name that you can trust

The navigation buttons on the left show you which products are available for business users and which are available for individuals.

The contact form to request free advice and a no obligation quote is at the bottom of this page.

All quotations for buy to let & HMO mortgages are provided to you free of charge and on a no-obligation basis - there is no pressure, make your decision in your own time.

What is a buy to let or HMO mortgage?

On this page we will cover the similarities and difference of the 2 types of product, we’ll start with Buy to Let and then cover HMO afterwards

Buy-to-let (BTL) mortgages are for landlords who want to buy property to rent it out. There are different types of buy to let mortgage, including those for limited companies, HMO mortgages, student lets and holiday homes. Buy-to-let mortgages are a lot like ordinary mortgages, but with some key differences:-

  • The fees tend to be much higher.
  • Interest rates on buy-to-let mortgages are usually higher.
  • The minimum deposit for a buy-to-let mortgage is usually 25% of the property’s value (although it can vary between 20-40%).
  • Most BTL mortgages are interest-only, however, BTL mortgages are also available on a repayment basis. This means you pay the interest each month, but not the capital amount. At the end of the mortgage term, you repay the original loan in full.
  • Generally, traditional buy to let mortgage lenders will require the property to be let using an assured shorthold tenancy (AST) agreement.
  • Most BTL mortgage lending is not regulated by the Financial Conduct Authority (FCA). There are exceptions, for example, if you wish to let the property to a close family member (e.g. spouse, civil partner, child, grandparent, parent or sibling). These are often referred to as a consumer buy to let mortgages and are assessed according to the same strict affordability rules as a residential mortgage.

How much you can you borrow for buy-to-let mortgages?

 The maximum you can borrow is linked to the amount of rental income you expect to receive, Lenders typically need the rental income to be 25–30% higher than your mortgage payment. For the mortgage product itself, buy-to-let mortgage lenders will usually require a deposit of at least 15%, although 20% is far more common.

Key Points:-

  • Let to Buy and Buy to Let.
  • Up to 85% LTV (loan to value).
  • Available for individuals, Ltd Co, LLP’s & SPV’s.
  • Interest only or Repayment.
  • No minimum income.
  • Unlimited sized portfolio.
  • Adverse credit.
  • First time landlord.
  • Funding available to first-time buyers who are looking to purchase an investment property.
  • Consumer Buy to let.
  • When purchasing a property below market value, you may be able to purchase without a deposit using a bridging loan. Once purchased, assuming the criteria can be met, you can then refinance to a traditional BTL mortgage.

Why use a broker to source your BTL mortgage?

An independent whole of market broker with access to high street banks, specialist Buy to Let lenders and exclusive products. With numerous changes in the BTL market over recent years; including tax rules changes, SDLT rules and mortgage affordability criteria, it’s more important than ever that you choose the right mortgage.

With a broker’s knowledge and expertise, you can be certain that whether you require a mortgage for a simple Buy To Let property or are looking to refinance a property portfolio, they will find the best deal for you – all brokers need to register with the FCA, and as part of that they need to treat customers fairly, meaning that they will offer you the most suitable product for your circumstances.

If you are interested in getting free advice on the best BTL mortgage for your circumstances, together with a no obligation quotation, please complete the contact form further down the page and one of our advisors will call you back to discuss your options.

What is a HMO?

A house in multiple occupation (HMO) is a property where both of the following apply:-

  • At least 3 tenants live there, forming more than 1 household.
  • There is a shared toilet, bathroom or kitchen facilities with other tenants.

A large HMO is a property where both of the following apply:

  • at least 5 tenants live there, forming more than 1 household.
  • There is a shared toilet, bathroom or kitchen facilities with other tenants.

A household is either a single person or members of the same family who live together. A family includes people who are:-

  • Married or living together - including people in same-sex relationships.
  • Relatives or half-relatives, for example grandparents, aunts, uncles, siblings.
  • Step-parents and step-children.

Landlords of HMOs must make sure that:-

  • Proper fire safety measures are in place, including working smoke alarms.
  • Annual gas safety checks are carried out.
  • Electrics are checked every 5 years.
  • The property is not overcrowded.
  • There are enough cooking and bathroom facilities for the number living there.
  • Communal areas and shared facilities are clean and in good repair,
  • There are enough rubbish bins/bags.

Examples of a HMO:-

  • House split into separate bedsits.
  • Shared house or flat, where the sharers are not members of the same family.
  • Hostel.
  • Bed-and-breakfast hotel that is not just for holidays.
  • Shared accommodation for students – although many halls of residence and other types of student accommodation owned by educational establishments are not classed as HMO’s.

Minimum bedroom size for licensed HMO's

If a HMO landlord applies for or renews a HMO licence on or after 1 October 2018, bedroom sizes must be at least:-

  • 6.51 square metres for a person aged 10 or over.
  • 10.22 square metres for 2 people aged 10 or over.
  • 4.64 square metres for a child under 10 years old.

Why create a HMO?

Given the extra responsibilities above, why would someone want to own a HMO? A traditional buy to let property would typically accommodate one person or a family. In rental terms, one rent would be due from the household, on a weekly or monthly basis. The household would also pay the utility bills. These can often be referred to as ‘single-lets’.

Let’s look at why a HMO is considered more profitable than a traditional buy to let:

Traditional buy to let
4 bedroom semi-detached house with 2 reception rooms
Rented to a family, consisting of a husband, wife and 2 children
Monthly rental income = £700
Annual rental income = £8400

HMO buy to let
4 bedroom semi-detached house with 2 reception rooms
1 reception room converted to a bedroom
Rented to 5 single working professionals
Monthly rental income per tenant = £400
Monthly rental income = £2000
Annual rental income = £24,000

HMO mortgage criteria

The majority of HMO mortgage lenders will require landlords to have experience in letting property. There are only a handful of lenders that may consider new landlords with no experience, however the rates offered may be higher than average. Some lenders may also have a preference on who manages the HMO, such as a letting agency as opposed to managing it on your own.

Despite their popularity, HMO mortgages are still considered a niche mortgage type. The mortgage application is very comprehensive when compared to a standard buy to let mortgage. For this reason, HMO mortgages tend to be offered through qualified mortgage brokers and not direct to landlords.

Lenders may request information on some or all of:-

  • Experience of being a landlord.
  • Personal or limited company mortgage.
  • Location of the HMO.
  • The number of lettable rooms.
  • Management type (landlord or letting agency).
  • Does the HMO have/need a license?
  • Does each room have its own AST agreement?
  • Rental income (proposed or actual).
  • Types of tenants (students, professionals, housing association).

HMO mortgage rates

HMO mortgage rates tend to be higher than standard buy to let mortgage products. This is because the HMO mortgage market is less competitive. Lenders that are prepared to lend will charge slightly higher fees and rates for the privilege. That being said, the income from an HMO should be more than enough to cover a mortgage, utility bills and maintenance. In addition, an HMO mortgage will usually take the rental income into consideration, drastically improving the maximum mortgage amount available.

HMO mortgages can be offered on variable and tracker rates. LTV rates usually start at 80% LTV, with more attractive rates being offered with higher deposits and lower LTV ratios.

Why use a broker for your HMO mortgage?

Many properties used as HMOs are houses or large buildings which have been converted specifically for this purpose. Many people require help and advice when looking to approach lenders to fund this kind of project. A broker will have a trusted panel of lenders that can accommodate almost any circumstances and are able to lend on almost any property type, including:-

  • Converted hostels.
  • Converted B&Bs.
  • Blocks of flats.
  • Shared houses on single or multiple ASTs.
  • Houses converted into bedsits.
  • Student halls & flats.
  • Converted bedsits.
  • Employee housing.

A simple HMO should take around the same as a buy-to-let mortgage but a more complex HMO could take longer.

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.

Buy To let & HMO mortgage process and key points :-

Here is a range of criteria based on the requirements of numerous HMO mortgage providers:

  • Minimum loans from £25,000 with no maximum.
  • SPV (Special Purpose Vehicle) or Ltd company applications accepted.
  • No maximum number of bedrooms.
  • Terms of 5 – 35 years available.
  • Interest only, capital repayment or part & part.
  • Minimum age 18.
  • Maximum age at redemption 110.
  • Maximum age at application 80.
  • Adverse credit accepted.
  • No minimum income.
  • Portfolio applications accepted.
  • First-time landlords

We aim to offer an agreement in principle within four hours. 

Locations

We currently serve the following UK post code areas (for example AB - Aberdeen means all areas in and around Aberdeen whose postcode starts with AB) :-

AB - Aberdeen, AL - St Albans, BA - Bath, BB - Blackburn, B - Birmingham, BD - Bradford, BH - Bournemouth, BL - Bolton, BN - Brighton, BR - Bromley, BS - Bristol, BT - Belfast, CA - Carlisle, CB - Cambridge, CF - Cardiff, CH - Chester, CM - Chelmsford, CO - Colchester, CR - Croydon, CT - Canterbury, CV - Coventry, CW - Crewe, DA - Dartford, DD - Dundee, DE - Derby, DG - Dumfries, DH - Durham, DL - Darlington, DN - Doncaster, DT - Dorchester, DY - Dudley, EC - London, EH - Edinburgh, E - London, EN - Enfield, EX - Exeter, FK - Falkirk, FY - Blackpool, G - Glasgow, GL - Gloucester, GU - Guildford, GY - Guernsey, HA - Harrow, HD - Huddersfield, HG - Harrogate, HP - Hemel Hempstead, HR - Hereford, HS - Western Isles, HU - Hull, HX - Halifax, IG - Ilford, M - Isle of Man, IP - Ipswich, IV - Inverness, JE - Jersey, KA - Kilmarnock, KT - Kingston Upon Thames, KW - Kirkwall, KY - Kirkcaldy, LA - Lancaster, LD - Llandrindod Wells, LE - Leicester, L - Liverpool, LL - Llandudno, LN - Lincoln, LS - Leeds, LU - Luton, ME - Medway, MK - Milton Keynes, ML - Motherwell, M - Manchester, NE - Newcastle, NG - Nottingham, N - London, NN - Northampton, NP - Newport, NR - Norwich, NW - London, OL - Oldham, OX - Oxford, PA - Paisley, PE - Peterborough, PH - Perth, PL - Plymouth, PO - Portsmouth, PR - Preston, RG - Reading, RH - Redhill, RM - Romford, SA - Swansea, SE - London, SG - Stevenage, SK - Stockport, SL - Slough, SM - Sutton, SN - Swindon, SO - Southampton, SP - Salisbury, SR - Sunderland, S - Sheffield, SS - Southend - On - Sea, ST - Stoke - On - Trent, SW - London, SY - Shrewsbury, TA - Taunton, TD - Galashiels, TF - Telford, TN - Tonbridge, TQ - Torquay, TR - Truro, TS - Cleveland, TW - Twickenham, UB - Uxbridge, WA - Warrington, WC - London, WD - Watford, WF - Wakefield, W - London, WN - Wigan, WR - Worcester, WS - Walsall, WV - Wolverhampton, YO - York, ZE - Lerwick.

Application process for both Buy to Let & HMO mortgages:-

  • Discuss your enquiry with either suitable Buy to Let/HMO mortgage lenders or a broker who can point you in the right direction and issue you with likely terms showing rate and fees etc.
  • When a suitable property is found or if this is a refinance, the process can begin. The lender or broker will run through the application form and send a list of the required documentation needed to begin the application process.
  • If the initial decision in principle is agreed by the lender (credit searches carried out etc.), the full application can be submitted and all documents will be checked through by an underwriter.
  • If everything is acceptable, the valuation will be instructed and legal work started. The valuation report will provide information to the lender regarding property and rental values, demand for an Buy To Let/HMO property in that area and condition of the property.
  • If the valuation report is satisfactory, the mortgage offer will be issued. A copy of this will be sent to you and your solicitor. If using a broker, they will usually run through this document with you to ensure it is understood and answer any questions you may have.
  • Your solicitor will handle the legal work such as carrying out searches etc. When everything is satisfied and the offer document is signed and returned, the funds can be drawn down.
  • Completion of the mortgage can now take place.

If you are looking for a Buy to Let or HMO mortgage, please complete the contact form below and an advisor from our broker will talk through your options, answer any questions, give you any other relevant advice and provide you with a no obligation quotation.

We offer rapid decisions in principle – often within four hours – and our BTL/HMO mortgage advisors are available to answer any questions that may arise.

Please use the form below to get free advice and a quote on the best product for your circumstances.

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