Rapid HMO Mortgages
For over 10 years, buy to let landlords and HMO landlords have partnered with Rapid to find the mortgages they need offering the most competitive rates and the most favourable borrowing terms.
To speak with one of the UK’s leading HMO mortgage brokers, please call us on 0208 150 7528 or email us at firstname.lastname@example.org.
Looking for help finding a mortgage for multiple occupancy house? Get in touch with our expert team today.
What is an HMO mortgage?
Like a buy to let mortgage, an HMO mortgage is a secured loan on a property you intend to rent to residential tenants but which you do not intend to live in yourself.
The definition of what HMO rental properties are varies from lender to lender.
Many lenders consider a HMO as a property capable of accommodating five or more households. These lenders would not offer you a mortgage on a standard HMO but you could apply to them for a standard buy to let mortgage instead.
Get in touch with us and share as much information as you can with our team about your HMO – we’ll search both the HMO mortgage market and the buy-to-let mortgage market to find the funding you need.
How Do I Repay a HMO Mortgage?
As with buy-to-let mortgages, most HMO mortgages are interest-only mortgages.
With each monthly mortgage payment, you don’t repay the “capital” – the amount of money you borrowed – you just repay interest on the capital. Interest is the charge you pay to your lender for advanced money.
The advantage of interest-only HMO mortgages is that you pay a lot less every month than you would if you were also repaying the capital. This presents you with the opportunity of making additional profit from the monthly rental income you collect from your tenants.
The disadvantage is that, if your mortgage goes to term (normally 25-35 years), you’ll be expected to pay the lender the original purchase price of the property in full. If you can’t, your property will be repossessed.
However, this rarely happens as most landlords hold onto their properties for 11.5 years before selling them. By doing this, they can repay the capital to the lender from the proceeds as well as making profit from any increase in the value of the property.