HMO Mortgage First-Time Landlord
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HMO Mortgage First-Time Landlord
Danielle Oliver and Ben Bayat explain how the HMO (house in multiple occupation) mortgage process works for first-time landlords.
Podcast approved by The Openwork Partnership on 19/12/2025.
Can you buy an HMO as a first time landlord? Can you get an HMO mortgage with no experience?
You can get a HMO mortgage as a first-time landlord, but many lenders do require some level of experience. They may want you to have rented a property out for between one and three years.
There can also be restrictions on the number of bedrooms in the property, just because more tenants can mean more issues.
What lending criteria do I need to meet for an HMO mortgage as a first-time landlord?
The criteria are lender dependent. Some lenders need you to meet a minimum income threshold. Some might require you to be an owner-occupier. By looking at your personal circumstances we can see which lender will fit your situation.
How much deposit is needed for an HMO mortgage?
You need around 15% to 35% as a deposit. It varies on the value of the house and also on the number of bedrooms. Another thing to bear in mind is your credit score. If you do have some credit issues, you’ll be looking at the higher end of that deposit requirement.
Is an HMO mortgage different to a Buy to Let mortgage?
Yes, it is different. Even though both are used to finance rental properties, they do have their own nuances.
A HMO mortgage will usually have stricter affordability checks and higher interest rates than a Buy to Let mortgage, simply because HMOs carry more risk to the lender.
Can I buy an HMO property to live in?
You first need to check with your local authority as to what they class as an HMO, and you may need an HMO licence. You also need to check with your lender to see if they would allow you to live in the property. If not, you would breach the mortgage terms and conditions.
Can I get an HMO as a first-time landlord and First Time Buyer?
Yes, you can get a HMO as your first property, but your mortgage options will be quite limited. It would be a case of checking whether you meet the other criteria with each lender.
Can I get an HMO as a first time landlord if I’m self-employed or a contractor?
Yes, you can get an HMO mortgage if you are self-employed or a contractor. You just need to be able to prove that you’ve got stable income through your tax returns. You would usually need two to three years worth of returns.
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What if I have bad credit? Can I still get an HMO as a first time landlord?
Yes, it is still a possibility. It will depend on the severity of the credit issues as to whether the lenders will accept you. Sometimes you might need to increase the size of your deposit, but it is definitely something we could look at.
Can I remortgage my HMO property? How does this work?
It’s important to keep tabs on timeframes and know when your initial deal is coming to an end. This will give you time to get things in place.
You’d meet with an advisor, and we would do the research and gather all the documents we require from you. We would then see if your current lender is offering a good deal, while shopping around to see if there’s anything better out there.
The options are presented to you, and once you’re happy we would do the application. Next, the lender does a valuation on the property to make sure it’s acceptable security and the correct licence is in place.
They then do the underwriting, and once everything has been accepted, you’ll receive an offer. It then passes to the legal team to take things through to completion.
Can I sell my HMO property?
Yes, of course you can sell the property. That’s not an issue, but bear in mind that the market for buyers might be a little smaller, due to the extra requirements of having a HMO property.
Is it worth buying an HMO property? What are the pros and cons?
It depends on your risk appetite. You’re dealing with multiple tenants, so more can go wrong, but you get rewarded for that with a higher yield. Essentially, you will have more responsibilities, but you get paid more.
Why are HMO mortgages so expensive? What costs are involved here?
They are more expensive than your typical Buy to Let, and that’s simply due to the risk that HMOs pose to a lender. Lenders charge more just to protect themselves.
There are a number of potential costs with a HMO mortgage – like valuation fees, arrangement fees and solicitors’ fees. There might be additional fees on top, depending on your location and the property itself.
How do I get an HMO mortgage? What is the process?
It’s very similar to the remortgage process. You’d meet with your advisor to go through your circumstances. We would check your eligibility for a mortgage – which is the main difference from a remortgage. Otherwise, the same steps apply.
How else can a mortgage broker help here? Anything you’d like to add?
A mortgage broker helps by looking at your personal circumstances and tailoring mortgage recommendations to your specific needs. We give you up-to-date market rates so that you know what you’re looking at, and guide you on the steps you need to take to move forward.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
MOST BUY TO LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.
Approved by The Openwork Partnership on 19/12/2025.
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