Mortgages for HMOs (Houses in Multiple Occupation)

One lender provides mortgages of up to £3 million and 85% loan-to-value. Trinity Specialist Finance can secure this type of funding which is also available to limited companies and clients up to 85 years of age.

What is an HMO?

A property is classified as a House in Multiple Occupation if it has more than one tenancy agreement in place and at least three tenants sharing toilet, bathroom and kitchen facilities.

HMOs require mandatory licensing if the building is at least three stories high and it has five or more tenants sharing living facilities.

Not all HMOs require a licence, but there is specific legistlation. Properites may need to be licensed by local councils.

Mortgage loan sizes

HMO rental yields are often higher than with traditional buy-to-lets. Mortgage lenders use the rental income from each room to work out how much they will advance and then apply their own specific rental calculations.

Trinity Specialist Finance has access one lender offering more generous mortgages, particularly for experienced landlords who have a portfolio of properties.

Less than four letting rooms. If a property generates £4000 rent each month, Trinity has access to one specialist lender offering a mortgage of up to £738,000 based on an interest rate of 5%. This debt service cover ratio is 130%.

It is possible to borrow approximately £1,300,000 to buy a larger HMO with seven letting rooms generating approximately £9000 rent each month. Please note, these figures were correct at the time of writing - June 2016.

Trinity secures HMO mortgages for:

• Limited companies
• Properties with between three and 20 sharers, including students and benefit recipients
• Landlords who own rental properties and looking to purchase an HMO
• Properties suitable as an HMO at the time of application with appropriate licences
• Refinancing clients looking to increase gearing
• Remortgages to lower monthly repayments