Buy-to-Let
HMO Mortgages: A Guide for Landlords
A house in multiple occupation can produce much higher rent than a single let, but it needs a specialist mortgage. Lenders look at the licence, the room-by-room rent, your experience and how the property is valued.
Written and reviewed by Davi Thakar, CeMAP qualified mortgage and protection adviser Updated
An HMO mortgage is a specialist buy-to-let mortgage for a house let room by room to three or more people from more than one household. Lenders look at the licence, the total room rents, your experience and how the property is valued, and those four things decide how much you can borrow.
HMOs often achieve much higher rent than letting the same house to one family, because each room is let separately. They also bring more management, more regulation and a smaller group of lenders. Student houses and professional house shares are the most common types.
This guide covers what counts as an HMO, licensing, how lenders assess and value them, converting a house and the costs to plan for. For the bigger picture, see our complete buy-to-let mortgage guide.
Can you get a mortgage on an HMO?
Yes, from specialist buy-to-let lenders. Expect to put down around 25%, and to show a licence where one is needed. Many lenders want at least a year of landlord experience, though some accept first-time HMO landlords. The rent is assessed on the total of the room rents, and the valuation method can change the loan by thousands of pounds.
What counts as an HMO?
In England, a house in multiple occupation is a property rented by at least three people who are not from one household and who share facilities such as a kitchen or bathroom. A household means a family, a couple or a single person. Three friends sharing a house is an HMO. A couple and their children is not.
Do you need a licence?
- Mandatory licence: needed in England if the property is let to five or more people forming more than one household who share facilities. GOV.UK sets out the rules on its HMO licence page. Licences last up to five years.
- Additional licensing: many councils also license smaller HMOs of three or four people.
- Planning: in some areas, councils have removed permitted development rights, so turning a house into an HMO needs planning permission. GOV.UK explains when planning permission is needed.
Lenders will ask for the licence or evidence it has been applied for. Renting out an unlicensed HMO that needs a licence can lead to an unlimited fine, so check the council’s rules before you offer.
How do lenders assess HMOs?
| Typical HMO lender approach | |
|---|---|
| Deposit | Usually 25%, sometimes 20% to 30% |
| Experience | Many want at least a year as a landlord, some accept first-time HMO landlords |
| Rental test | Based on the total of the room rents, with cover ratios similar to buy-to-let |
| Number of rooms | Some limit small HMOs to six bedrooms. Larger HMOs need commercial-style lenders |
| Valuation | Bricks and mortar, or on an investment basis using the income |
| Ownership | Personal name or limited company, with company options growing |
Why does the valuation basis matter?
Some lenders value an HMO as a normal house (bricks and mortar). Others, mainly for larger HMOs, value it on its income, which can be much higher. Lenders using the income basis usually want a strong letting history and a licence in place, and the valuer will check the rents against local room lets.
Illustration only
A five-bedroom house worth £240,000 as a family home lets as an HMO for £2,750 a month. A lender using bricks and mortar would lend 75%, £180,000. A lender valuing it on income might put it at £300,000, allowing a 75% loan of £225,000, if the rent passes its cover test.
Real client case: a five-room HMO assessed on full occupancy
Our client was buying a five-room HMO. The lender worked out the maximum borrowing on the basis that all five rooms were let, 100% occupancy. That gave the landlord the borrowing he needed to buy the HMO he wanted, and the mortgage completed.
What this shows: how a lender treats the room rents can make or break an HMO purchase. Some assume every room is let, others allow for empty rooms, and that difference changes how much you can borrow.
Which lenders accept HMOs? (checked 17 October 2026)
| Lender (source) | HMO policy |
|---|---|
| The Mortgage Works | HMO products up to 75% LTV |
| Leeds | HMO range, 2 years’ landlord experience needed |
| Aldermore | Up to 6 bedrooms |
| Fleet | HMO products up to 6 bedrooms |
| Landbay | Small HMOs up to 6 bedrooms, large HMOs 7 to 12 bedrooms |
| Vida | Accepted, minimum value £100,000 |
| Accord | Only additional or discretionary licences, single tenancy, up to 4 people. No mandatory licence HMOs |
| Skipton | Up to 4 tenants and 4 bedrooms. Declined if a mandatory licence is needed |
| NatWest | Not accepted |
These are summaries of each lender’s published broker criteria, checked on 17 October 2026. Criteria change often and meeting a rule does not guarantee approval.
Which situations do lenders see most?
These are illustrative situations, not Option Finance client outcomes.
First HMO after a single let
You have a year or two as a landlord and want to buy a licensed HMO. Most HMO lenders will look at this.
Your letting record is the keyBuying a house to convert
The house is a family home today. You need it converted, licensed and let before an HMO lender will value it as one.
Short-term finance first, then refinanceRefinancing on an income valuation
Your HMO is full and well run, but the mortgage is based on bricks and mortar. A lender using the income basis may lend more.
Show a clean rent historyNo landlord experience at all
You want an HMO as your first rental. A few lenders accept this, usually with a bigger deposit or a smaller HMO.
Fewer lenders, so the case must be tidyCan you convert a house into an HMO?
If you buy a house to convert, the property is not an HMO at purchase. You may need a standard buy-to-let mortgage or bridging finance first, then refinance onto an HMO mortgage once it is converted, licensed and let. Our refurbishment mortgage guide covers funding the works.
Before you buy, check planning, the licence standards for room sizes and facilities, fire safety and building regulations. GOV.UK explains building regulations approval. A conversion that does not meet these standards can stop the refinance.
What documents will the lender want?
- The HMO licence, or proof it has been applied for
- A room-by-room rent schedule and current tenancy agreements
- Your property schedule and landlord experience
- Planning consent where the area needs it
- Proof of deposit and your personal income
- Details of any works done, with sign-offs
What running costs should you budget for?
- Bills, which landlords often include in HMO rents
- Higher wear and tear and more frequent redecoration
- Fire safety requirements, such as fire doors and linked alarms
- Licence fees and renewals
- Management, either your time or an agent’s higher fee
- More frequent voids as individual tenants come and go
Our broker fee is £499 in total: £299 on application and £200 when a mortgage offer is issued. The £299 is fully refundable if the application is declined. Your initial consultation is free.
Frequently asked questions
What is an HMO?
In England, a property let to at least three people from more than one household who share facilities such as a kitchen or bathroom.
Do I need a licence for an HMO?
A mandatory licence is needed if five or more people from two or more households live there. Many councils also license smaller HMOs.
Can a first-time landlord get an HMO mortgage?
Some lenders accept it, but many want at least a year of landlord experience.
How much deposit do I need for an HMO?
Usually 25%, sometimes 20% to 30% depending on the lender and size of HMO.
Are HMOs valued differently?
Some lenders value them as normal houses, others on their rental income. The basis can make a big difference to how much you can borrow.
Can I buy an HMO through a limited company?
Yes. Many HMO lenders accept special purpose vehicles, usually with personal guarantees from the directors.
Can I get an HMO mortgage before the property is converted?
Usually not. Most HMO lenders want the property converted, licensed and let first, so a bridging loan or standard buy-to-let is often used for the purchase.
Speak to Option Finance about your HMO
Tell us about the property, the rooms and your experience. We will tell you straight which lenders fit, which valuation basis they use and how much deposit you need.
Book a free initial consultation using the enquiry form below. See our buy-to-let mortgage advice, our limited company buy-to-let guide and our guide to portfolio landlord mortgages.
Talk through your mortgage options
Tell us about your plans and circumstances. Your initial consultation is free.
Some buy-to-let and commercial mortgages are not regulated by the Financial Conduct Authority. Regulation depends on the mortgage type and circumstances.
Talk through your mortgage options
Tell us about your plans and circumstances. Your initial consultation is free.
Written and reviewed by Davi Thakar
Director & Senior Mortgage Broker
CeMAP Qualified Mortgage and Protection Adviser
Davi founded Option Finance with a vision to deliver transparent mortgage advice from a wide panel of lenders. With over 10 years in financial services, he specialises in complex cases including adverse credit, self-employed borrowers with limited trading history, and large buy-to-let portfolios. He works directly on complex cases and explains each option clearly.
Meet Davi Thakar
