HMO
Live Calculator
Stress Test

HMO Finance Calculator

Calculate HMO mortgage affordability with ICR stress testing

AI-Powered
Free to use
Step 1 of 6Property Details

Property Details

Enter your HMO property value and deposit

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.

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
Calculate cash-on-cash return and monthly cashflow

How It Works

Understanding the calculation method

The HMO Finance Calculator analyses your HMO mortgage options in detail:

1. Property & Deposit - Enter your property value and deposit to calculate loan amount and LTV 2. Rental Income - Input number of rooms and rent per room to calculate gross rental income 3. Operating Costs - Factor in HMO management fees (typically 12-18%) and void allowance 4. Finance Terms - Set your interest rate and loan term for payment calculations 5. Lender Stress Testing - Apply the lender's stress test rate (typically 7-9%) to calculate stressed ICR 6. Affordability Assessment - Calculate whether your rental income meets the lender's ICR requirement

The calculator shows both interest-only and repayment mortgage costs, helping you understand 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.
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% typically attract better interest rates and more lender choice.
Interest Coverage Ratio (ICR) measures whether your rental income covers the mortgage interest. Lenders stress test by calculating ICR at a higher rate (typically 7-9%) 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 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) to account for management complexity.
Yes, but 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.

Related Property Terms

HMO mortgage rates UKHMO finance calculatorInterest Coverage Ratio HMOHMO mortgage stress testHMO loan to valueMulti-let mortgage affordabilityHMO BTL mortgageRoom rent mortgage calculationHMO mortgage lenders UKCash on cash return HMO