House of Multiple Occupancy (HMO) Mortgages

HMO mortgages allow the borrower a first charge loan using an investment residential property as security.

what is a house of multiple occupancy?

A house of multiple occupancy refers to a property in which at least 3 people occupy. It is sometimes also referred to as a ‘house share.’

An HMO Mortgage is a conventional buy to let mortgage taken over a security that has multiple tenants. It is referred to as a House of Multiple Occupancy and generally has shared bathing and kitchen facilities.

An HMO mortgage provider will lend to a set percentage of the purchase price of the property and this is generally at the top end (Loan to Value) of alternate forms of finance, as of late 2018 the highest LTV available are 75-80%.

As a long-term product the HMO mortgage rates often tend to be very competitive and the borrower is provided with a choice of a fixed or variable rate product. A fixed rate product allows the borrower to plan monthly expenditure; a variable rate product holds the advantage of a potentially decreasing monthly payment.