HMO
Below ICR

HMO Finance Calculator

Calculate HMO mortgage options and stress test affordability

AI-Powered
Free to use

Property & Loan Details

Rental Income

Lender Stress Test

Fails Stress Test

Stressed ICR: 0.0% | Required: 145.0%

HMO Mortgage Rate Guidance

60% LTV or less

5.49% - 6.29%

61-65% LTV

5.79% - 6.49%

66-70% LTV

5.99% - 6.79%

71-75% LTV

6.29% - 7.29%

HMO mortgages typically carry a 0.5-1.5% premium over standard BTL rates. Rates are indicative only.

Loan Summary

Loan Amount

£0

LTV

0.0%

Gross Annual Rent

£0

Net Annual Rent

£0

After voids & management

Affordability

Monthly Interest (IO)

£0

Interest-only payment

Monthly Payment (Rep)

£0

Full repayment mortgage

ICR (Current Rate)

0.0%

ICR (Stressed)

0.0%

Cashflow Analysis

Monthly Cashflow

£0

After mortgage (IO) & costs

Annual Cashflow

£0

Cash on Cash Return

0.0%

AI RECOMMENDATION
HMO Finance Analysis
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Enter your property details above to see AI-powered analysis and recommendations for your HMO Finance calculation.

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About the HMO Finance Calculator

What it does and how it helps you

The HMO Finance Calculator helps UK landlords calculate mortgage affordability and stress test requirements for House in Multiple Occupation properties. Model different interest rates, loan-to-value ratios, and lender ICR requirements to understand your borrowing capacity and monthly payments for multi-let properties.

Calculate HMO mortgage affordability with stress testing
Model different LTV ratios and interest rate scenarios
Assess ICR compliance at lender stress test rates
Compare interest-only vs repayment mortgage costs

How It Works

Understanding the calculation method

The HMO Finance Calculator analyses your HMO mortgage options in detail: 1. Property & Loan Details - Enter your property value, deposit, and proposed interest rate 2. Rental Income - Input number of rooms and expected rent per room to calculate gross rental income 3. Operating Costs - Factor in HMO-specific costs like management fees (typically 12-18%), voids, and other expenses 4. Lender Stress Testing - Apply the lender's stress test interest rate (typically 7-9%) to calculate stressed ICR 5. Affordability Assessment - Calculate whether your rental income meets the lender's ICR requirement (usually 125-145%) The calculator shows both interest-only and repayment mortgage costs, helping you understand monthly commitments and whether your HMO passes lender affordability criteria. HMO mortgages typically require higher deposits (25%+) and attract higher interest rates than standard BTL mortgages.

When to use this calculator

Use this calculator when planning HMO finance, comparing different mortgage products, or stress testing affordability. Essential for understanding whether lenders will approve your HMO mortgage application. Particularly useful when evaluating whether room rents will generate sufficient income to meet ICR requirements at stressed rates.

Frequently Asked Questions

Common questions about this calculator

HMO mortgage rates typically range from 5.5% to 7.5%, depending on your LTV ratio, experience, and the lender. Rates are usually 0.5-1.5% higher than standard BTL mortgages due to the increased complexity and perceived risk of multi-let properties. Lower LTV ratios (60-65%) attract the best rates.
Most HMO lenders require a minimum 25% deposit (75% LTV), though some offer up to 80% LTV for experienced HMO landlords. Lower LTV ratios like 65% or 70% typically attract better interest rates and more lender choice. First-time HMO landlords may need larger deposits.
Interest Coverage Ratio (ICR) measures whether your rental income covers the mortgage interest. Lenders stress test by calculating ICR at a higher rate (typically 5.5-9%) to ensure you can still afford payments if rates rise. Most HMO lenders require ICR of 125-145% at the stressed rate.
HMO mortgages use gross room rents (not net) for affordability calculations, which helps as HMO rental income is typically 30-70% higher than single-let. However, lenders apply higher ICR requirements (125-145% vs 125% for BTL) and use higher stress test rates to account for the increased management complexity and void risks.
Yes, but it's more challenging. Many specialist HMO lenders require at least one year of BTL experience. First-time HMO landlords may face higher rates, larger deposit requirements (30%+), or need to demonstrate completion of HMO-specific training courses. Some lenders offer 'first-time HMO' products specifically designed for this market.

Related Property Terms

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