HMO mortgage payment calculator
Calculate monthly payments for interest-only and repayment HMO mortgages.
Mortgage details
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Most HMO lenders max at 75%
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Interest only
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Repayment
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Loan amount
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Total interest (IO, 25yr)
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Total repaid (repayment)
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Monthly interest saving (IO)
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ICR stress test calculator
Check whether your HMO rental income passes the lender's interest coverage ratio requirement — the key test for HMO mortgage approval.
Your HMO details
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Total annual rent at target occupancy
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Actual ICR
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Required ICR
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Stress test
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Stress rate used
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Annual interest at stress
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Min rent needed to pass
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Rental income coverage of stressed interest
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0%
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200%+
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Maximum HMO borrowing calculator
Find the maximum mortgage a lender will offer based on your HMO rental income and tax position.
Your rental income
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Lenders may use 100% occupancy (full asking rent)
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Basic-rate taxpayer
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Higher-rate taxpayer
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Gross annual rent
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75% LTV cap
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Effective limiting factor
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HMO mortgage rate comparison
Compare 2-year fixed, 5-year fixed, and tracker rates on your HMO — total cost over the deal period and monthly difference.
Loan details
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Rate scenarios (HMO BTL, 75% LTV — mid 2025 indicative)
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Base rate + margin (variable)
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| Product | Rate | IO payment/mo | Arrangement fee | 2yr total cost | 5yr total cost |
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How HMO mortgages differ from standard BTL
HMO mortgages are specialist products with different underwriting criteria to standard buy-to-let mortgages. Understanding the key differences is essential before applying:
- Smaller lender panel. Far fewer lenders offer HMO products than standard BTL mortgages. Mainstream high-street lenders typically do not offer HMO-specific mortgages. Specialist lenders including Paragon, Shawbrook, Foundation Home Loans, and Precise Mortgages are among the more active HMO lenders. A whole-of-market mortgage broker is strongly recommended for HMO applications.
- Higher rates. HMO mortgage rates are typically 0.5–1.5% above equivalent standard BTL rates. This reflects the specialist nature of the product and the smaller lender pool. As of mid-2025, competitive HMO BTL 2-year fixed rates start from approximately 5.2–5.6% at 75% LTV.
- ICR stress test. The Interest Coverage Ratio (ICR) is the primary affordability test for HMO mortgages. Lenders require the annual rental income to cover the annual mortgage interest by at least 125–145%, calculated at a stressed rate above the actual product rate. Higher-rate taxpayers face a more stringent test.
- Minimum property value. Many HMO lenders have minimum property value requirements — commonly £100,000–£150,000 minimum. Some specify minimum values for the individual rooms or minimum numbers of lettable rooms.
- Licence required. Most HMO lenders require the property to hold (or be eligible for) a mandatory or selective HMO licence before they will lend. Unlicensable properties — or those in selective licensing areas where the investor cannot obtain a licence — will be declined by most lenders.
Frequently asked questions
What is the ICR stress test and why does it matter?
The Interest Coverage Ratio (ICR) determines how much you can borrow on an HMO. Lenders require that annual rental income covers the annual mortgage interest by a set multiple (125–145%), calculated at a stressed rate — typically 5.5–7%, higher than the actual product rate. For a basic-rate taxpayer, the test is usually 125% at 5.5%. A higher-rate taxpayer might face 145% at 6.5%. This means higher-rate taxpayers can borrow significantly less on the same rental income. The ICR tab above shows whether your specific deal passes the test.
Can I get an 80% LTV HMO mortgage?
A small number of specialist lenders offer HMO products up to 80% LTV, but the product range is very limited and rates are significantly higher than at 75%. The vast majority of HMO mortgage products are available at a maximum of 75% LTV. For most investors, 75% LTV (25% deposit) should be treated as the practical maximum for planning purposes. At 80% LTV, the ICR test also becomes harder to pass because the loan — and therefore the interest — is larger.
Do HMO mortgages need the property to be licensed?
Yes — most HMO lenders require evidence that the property either already holds an HMO licence or is eligible for one. For mandatory licensing (5+ person HMOs), the licence must be obtained before the mortgage completes. Some lenders accept evidence of a submitted licence application. Properties in areas with selective licensing schemes must also comply with local requirements. Always check with your broker which lenders will accept the specific property's licensing status before applying.
Should I use a specialist HMO broker?
Yes. The HMO mortgage market has a smaller lender panel with more complex underwriting criteria than standard BTL. A whole-of-market broker who specialises in HMO products can identify lenders willing to lend on your specific property type, room configuration, and tax position — and can often access products not available directly to the public. HMO mortgage applications declined by one lender do not affect your credit score in the same way as consumer credit applications, but repeated declined applications to the wrong lenders waste time and delay your purchase.
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Disclaimer
This calculator provides estimates for illustrative purposes only. Actual lender criteria, stress rates, and ICR requirements vary and change regularly. HMO mortgage availability depends on property type, location, licensing status, and borrower profile. Always speak to a qualified, FCA-regulated mortgage broker before making any borrowing decisions.
About the author
✓ Editorially reviewed — all Poqet guides are checked for factual accuracy before publication and updated when UK rates or legislation change. Editorial Policy