When James decided to move beyond his first buy-to-let flat in Hackney and invest in a four-bedroom HMO near King’s Cross, he quickly realised this wasn’t just another property purchase. The mortgage options looked different, the criteria felt tighter, and the interest rates were higher than he expected. What began as hesitation soon turned into research-heavy evenings comparing products and projections. By grounding his decisions in real numbers and understanding how HMO lending works, James transformed uncertainty into strategy — and built a property investment that delivered stronger cash flow than his standard buy-to-let ever had.
If you’re considering a similar move, this guide breaks down HMO buy-to-let mortgage rates, what to expect in today’s market, and how to approach them with confidence.
1. What Is an HMO Buy-to-Let Mortgage?
A House in Multiple Occupation (HMO) is typically defined as a property rented to three or more unrelated tenants who share facilities such as kitchens or bathrooms. From a lender’s perspective, HMOs are considered more complex than single-let properties due to management intensity and tenant turnover.
As a result, HMO mortgage rates usually sit around 0.5% to 1% higher than standard buy-to-let rates, reflecting the perceived additional risk and specialist underwriting involved.
2. Typical HMO Buy-to-Let Mortgage Rates
As of early 2026, HMO buy-to-let mortgage rates generally fall within the following ranges:
Example Rate Ranges
- 2-year fixed HMO mortgage: approximately 4.8% to 5.5%
- 2-year fixed at 75% LTV: commonly around 5.3%
- Limited company (SPV) HMO mortgages: broadly similar, often in the mid-5% range
These products often include arrangement fees, valuation costs, and early repayment charges, which should be considered alongside the headline interest rate.
By comparison, standard buy-to-let mortgage rates have recently averaged in the mid-4% to low-5% range, making HMO borrowing slightly more expensive overall.
3. What Affects HMO Mortgage Rates?
Several key factors influence the rate you’re likely to be offered:
Loan-to-Value (LTV)
Most lenders cap HMO mortgages at 75% LTV, meaning a minimum 25% deposit is usually required. Lower LTVs can sometimes unlock slightly better rates.
Property Size and Type
Smaller HMOs (3–6 bedrooms) are generally easier to finance than larger, more complex properties. Some lenders restrict the number of tenants they will accept.
Borrower Experience
Experienced landlords with existing HMO portfolios may access more competitive products than first-time HMO investors.
Ownership Structure
Rates for limited company HMOs are often similar to personal borrowing, though some lenders adjust pricing based on perceived tax or regulatory risk.
4. Wider Market Trends Influencing HMO Rates
Recent shifts in the wider mortgage market have begun to ease borrowing costs:
- UK base rates have shown modest reductions, encouraging lenders to gradually lower mortgage pricing.
- Buy-to-let mortgage rates have softened compared to recent peaks, improving affordability for landlords.
- Despite this, HMO rates remain slightly higher due to regulatory requirements, licensing considerations, and valuation complexity.
While the direction of travel is positive, HMO lending continues to be priced as a specialist product rather than a mainstream one.
5. How to Approach HMO Mortgage Decisions
To secure the most suitable HMO mortgage:
- Use a specialist broker who understands HMO underwriting, rental stress testing, and lender appetite.
- Assess total borrowing cost, including fees and long-term rate impact, not just the initial fixed rate.
- Stress-test rental income to ensure affordability if rates rise at the end of a fixed term.
- Factor in licensing and management costs, which affect overall profitability more than interest rates alone.
Conclusion: Are HMO Mortgage Rates Worth It?
HMO buy-to-let mortgage rates are typically higher than standard buy-to-let products, with 2-year fixed rates commonly sitting in the mid-5% range. However, HMOs often deliver higher rental income and stronger yields, which can offset the increased cost of borrowing.
For landlords willing to manage complexity and stay compliant, HMOs remain a compelling investment strategy. With the right mortgage structure and realistic financial planning, the higher rates don’t have to be a barrier — they simply become part of a smarter, data-driven investment decision.