HMO mortgages for limited companies.
Small and large HMOs, held through a company or SPV. We arrange the finance, and we've run these buildings ourselves.
What is an HMO mortgage?
A mortgage on a house in multiple occupation, a property let to three or more people from more than one household, sharing facilities.
It's a different product from a standard buy-to-let, because it's a different asset. A standard BTL is valued as a house. An HMO is valued on what it earns, or somewhere between the two, and that changes everything about how it's underwritten.
Lenders treat HMOs as higher-yield, higher-management, higher-risk. Fewer lenders offer them. Rates sit above standard BTL. Criteria are tighter. And the valuation basis, bricks-and-mortar versus commercial/investment value, can swing the loan by a large margin on the same building.
We arrange HMO finance for limited companies and SPVs only. Not individual landlords.
HMO mortgage rates.
This is the section people arrive for. What follows is how HMO pricing works and what moves it; the live numbers we quote from our panel on application, because a rate published today is stale within weeks.
HMO rates sit above standard buy-to-let, and limited company products typically sit above personal equivalents again. Where in the range you land depends on LTV, HMO size, licensing status and your track record, more than on any headline figure.
What moves the rate:
| LTV | Higher LTV prices up sharply; the best pricing sits at lower leverage |
| Small vs large HMO | Large HMOs have fewer lenders and price higher |
| Licensing | Licensed and compliant prices better than pending |
| Experience | First-time HMO landlords face a narrower panel and higher pricing |
| Company vs personal | Company products typically sit above personal equivalents |
| Valuation basis | A commercial valuation can lift the loan but may price differently |
Fees to budget for: an arrangement fee, a valuation fee (HMO valuations cost more and take longer than standard BTL, and are often the critical path), legals, and our broker fee, disclosed to you in full before you commit.
Blocked on the lender panel: the verified rate range from panel, LTV cap from panel, and fee figures from panel drop in here with a "rates correct as at date" stamp. We won't publish a guessed number on a page a developer budgets a scheme from.
Model it before you call: HMO mortgage calculator →
Small HMO or large HMO?
The distinction that decides which lenders will even look at you.
- Small HMO: typically 3 to 6 lettable rooms. The widest lender market. Many mainstream BTL lenders have an HMO product at this size. Usually valued on bricks and mortar, sometimes with an investment-value uplift.
- Large HMO: typically 7+ rooms. A different market. Fewer lenders, often commercial rather than BTL divisions, commonly valued on an investment/commercial basis. Rates and fees step up. The upside: a commercial valuation on a well-let large HMO can support materially more debt than the bricks-and-mortar figure.
Where it gets awkward: the threshold isn't uniform. One lender's "large" starts at 7 rooms, another's at 6, another counts occupants rather than rooms. A building can be a small HMO to one lender and a large HMO to another. That single classification changes your rate, your LTV and your lender list, and it's the most common reason an HMO case gets placed badly.
HMO mortgage criteria.
In roughly the order they check it.
- The property. Room sizes against licensing minimums. Kitchen and bathroom ratios. Fire doors, alarms, escape routes. Whether the layout matches the licence.
- The licence. Mandatory licensing applies to larger HMOs (broadly five or more occupants from two or more households). Additional and selective schemes vary by council: Manchester, Salford and Liverpool all operate schemes with different requirements. A lender wants to see the licence, or a credible route to it.
- Planning and Article 4. See below. This is the one that kills deals late.
- Your experience. Most HMO lenders want prior landlord experience; many want prior HMO experience. First-time HMO landlords have a real but narrower market, and coming through a company doesn't change that.
- The company. An SPV with the right SIC codes, directors' details, personal guarantees. SPV mortgages explained →
- Rental coverage. Stress-tested at the lender's notional rate. HMO gross yields are usually strong enough that coverage isn't the binding constraint, the property and the licence are.
- Tenant type. Some lenders exclude housing benefit tenants, students, or asylum contracts. It varies enormously and it's rarely on the product sheet.
Licensing, Article 4 and planning.
The part that catches people, and the part a lender's product page won't tell you.
Licensing is about the property being fit for multiple occupation, mandatory for larger HMOs, plus additional and selective schemes that vary by council.
Planning is separate, and it's the one that bites. Converting a house (use class C3) to a small HMO (C4) is usually permitted development, unless the council has made an Article 4 direction removing that right. Then you need full planning permission, and councils that make Article 4 directions do so precisely because they want fewer HMOs.
Large HMOs (7+) are sui generis and always need planning, everywhere.
Why this matters to your mortgage: a lender will not fund an HMO that doesn't have, or can't get, the planning it needs. An Article 4 area with a hostile council can make a perfectly good building unfundable as an HMO. This is discovered late, after valuation, at your cost.
Check Article 4 before you offer, not after. Large parts of Greater Manchester and Liverpool are covered.
We've converted and operated these buildings. We know which councils are difficult, and we'd rather tell you before you're committed.
Remortgaging an HMO.
Yes, and it's often where the value is, because a seasoned, licensed, fully-let HMO is a much easier asset to lend against than a proposed one.
The common route: bridge to buy and convert, then remortgage onto a term HMO facility once it's licensed and let. Refurbishment bridging →
The trap: the six-month rule. Some lenders won't remortgage within six months of purchase, or will lend against your purchase price rather than the new valuation. On a conversion where you've added substantial value, that's the difference between the deal working and not. Check your exit lender's position before you draw the bridge, not after.
On unfavourable locations, honestly: location affects both valuation and lender appetite. Some lenders exclude specific postcodes or oversupplied student areas outright. It's not always fixable, but it is knowable in advance.
Where lender appetite is least visible.
HMO lending is where lender appetite varies most and where it's least visible from the outside. One lender calls 6 rooms large; another calls it small. One accepts a pending licence; another wants it issued. One funds student HMOs in Fallowfield; another won't touch the postcode. None of this is on a product sheet.
- Classify the building correctly before it goes anywhere: small vs large decides your whole lender list
- Check Article 4 and licensing before valuation, not after
- Match tenant type to lenders who actually accept it
- Push back on valuations where the investment basis is defensible
- Tell you when it's really a commercial case rather than a BTL one
We're independent. No lender owns us. And we work with limited companies and SPVs only.
The building, the licence, and a straight read.
- Call0333 577 1988
- Emailinfo@huntergrey.co.uk
- Office139-143 Union St, Oldham, Greater Manchester, OL1 1TE
Converting first? Refurbishment bridging → · Model the numbers: calculator →
HMO mortgages, answered.
What is an HMO mortgage?
A mortgage for a property let to three or more people from more than one household sharing facilities. It's underwritten differently from standard buy-to-let because the property is valued partly or wholly on what it earns.
Can you get a mortgage on an HMO?
Yes. Fewer lenders offer them than standard BTL, rates are higher and criteria tighter, but it's an established market, particularly for limited companies.
What are HMO mortgage rates?
HMO rates sit above standard buy-to-let, and company products above personal ones, with the exact figure driven by LTV, HMO size, licensing and experience. We quote live terms from our panel on application rather than publish a rate that dates within weeks. Calculator →
Are HMO mortgage rates higher for limited companies?
Usually, with higher arrangement fees too. The tax position often justifies it, but that's your accountant's call. Limited company buy-to-let →
What's the difference between a small and large HMO?
Broadly, small is 3–6 lettable rooms and large is 7+. Large HMOs have fewer lenders, price higher, and are usually valued on a commercial basis. The threshold varies by lender: the same building can be small to one and large to another, which changes your rate and your options.
What are HMO mortgage requirements?
Room sizes meeting licensing minimums, correct facility ratios, fire safety, the right licence, planning consent (including Article 4 where it applies), landlord experience, an SPV with correct SIC codes, and rental coverage at the lender's stress rate.
Do I need a licence for an HMO mortgage?
For a mandatory-licensable HMO, a lender will want the licence or a credible route to it. Additional and selective schemes vary by council.
What is Article 4 and why does it matter?
An Article 4 direction removes permitted development rights, so converting a house to a small HMO needs full planning permission. Councils use it to limit HMOs. A lender won't fund an HMO that can't get the planning it needs, so check before you offer.
Can I remortgage an HMO?
Yes, and a seasoned licensed HMO is easier to fund than a proposed one. Watch the six-month rule: some lenders won't remortgage within six months of purchase, or will lend against purchase price rather than new value.
Can I get an HMO mortgage as a first-time landlord?
It's harder. Most HMO lenders want prior landlord experience and many want prior HMO experience. There's a market, but it's narrower and prices higher.
Do you work with individual landlords?
No. Limited companies, SPVs and corporate borrowers only.