Mortgages for Houses in Multiple Occupation

Our new and improved range of mortgages for Houses in Multiple Occupation (HMO) offers brokers even more lending options for clients in the buy to let market.

For landlords seeking a bigger return

As buy to lets have been hit by stamp duty and interest tax relief changes, landlords are looking elsewhere for higher returns. Here’s why we think demand for HMO is set to grow:

  • HMO properties typically achieve the highest rental yields at 7.2% on average.*
  • That’s 1% above the average buy to let yield.*

Tailor made Small and Large HMO mortgages

We use specialist valuers and underwriters to provide a service that’s tailor-made for both Small HMO properties (housing up to and including 6 occupants) and Large HMO properties (housing more than 6 occupants).

  • Rental value will be based on 100% occupancy of lettable rooms for all HMO properties.
  • Large HMO valuations are commercial and yield based.
  • Small HMO valuations are calculated in a similar way to standard buy to lets.

New improved criteria

To widen the appeal of HMO mortgages, we’ve improved our qualification criteria:

  • LTV is now 75% for greater purchasing power.
  • The maximum loan value is now £750,000 as HMOs tend to be more expensive.
  • Minimum ICR on HMO properties is now 165% to account for higher maintenance, running and management costs.
  • The upper limit of bedrooms is now 8 to help landlords access a wider range of HMO properties.

Choosing a Large or Small HMO product

Before we can underwrite your HMO application, we’ll need to carry out the appropriate valuation. With this in mind, it’s vital you base your choice of a Small or Large HMO product on the correct criteria. If you have any doubts, please don’t hesitate to contact your BDM.

Let’s get started

You can start your application right here or contact your BDM for any extra support or guidance you might need.

*Source: BDRC Landlords Panel report (Q3 2018)

 

2 Year Small HMO Fixed Rate Mortgages

Initial rate fixed up to and inc. 31/08/21Then the Society's BTL Variable Rate less 1% discount up to and inc. 31/08/2024, (currently)Then the Society's BTL Variable Rate thereafter, (currently)Overall cost for comparison (APRC)Max LTVProduct Fee
2.69% 4.99%5.99%5.5%60%£999 View
Max loan amount £750,000 / Min loan amount £50,000 / £500 Cashback upon completion
2.89% 4.99%5.99%5.6%70%£999 View
Max loan amount £750,000 / Min loan amount £50,000 / £500 Cashback upon completion
3.09% 4.99%5.99%5.6%75%£999 View
Max loan amount £750,000 / Min loan amount £50,000 / £500 Cashback upon completion

5 Year Small HMO Fixed Rate Mortgages

Initial rate fixed up to and inc. 31/08/24Then the Society's BTL Variable Rate thereafter, (currently)Overall cost for comparison (APRC)Max LTVProduct Fee
3.09% 5.99%5.2%60%£999 View
Max loan amount £750,000 / Min loan amount £50,000 / £500 Cashback upon completion
3.29% 5.99%5.3%70%£999 View
Max loan amount £750,000 / Min loan amount £50,000 / £500 Cashback upon completion
RATES CORRECT AS AT 03 may 2019

Warning: Your home may be repossessed if you do not keep up repayments on your mortgage.

Representative Example

A mortgage of £200,000.00 payable over 25 years initially on a fixed rate for 2 years at 3.09% and then a 1.00% discount on our current Buy to Let Variable Rate of 5.99% for 3 years and then on our current Buy to Let Variable Rate of 5.99% for the remaining 20 years would require 24 monthly payments of £515.00, 36 monthly payments of £831.67 and 240 monthly payments of £998.33.

The total amount payable would be £482,934.00 made up of the loan amount plus interest of £281,900.00 and application fee £0, product fee £999, valuation fee £0, chaps fee £35.

The overall cost for comparisons is 5.6% APRC representative.

This representative example assumes a mortgage completion date on the 1st day of a calendar month.

The above representative example is for illustration purposes only and may vary depending on your personal circumstances.

Unless otherwise indicated, these products are only available for house purchases or for customers remortgaging from another lender. A product fee is payable on application but is refundable should the mortgage not complete. A mortgage exit fee of £199 will apply.

  • 10% capital repayments are allowed each year during the fixed rate period without incurring an Early Repayment Charge.
  • Tapered Early Repayment Charges apply.
  • Interest calculated daily.
  • Free standard valuation up to £999.
  • Maximum loan £750,000.
  • Available for properties with up to and including 8 bedrooms, and housing up to and including 6 occupants.
  • Available for properties in England, Scotland and Wales.

2 Year Large HMO Fixed Rate Mortgages

Initial rate fixed up to and inc. 31/08/21Then the Society's BTL Variable Rate less 1% discount up to and inc. 31/08/2024, (currently)Then the Society's BTL Variable Rate thereafter, (currently)Overall cost for comparison (APRC)Max LTVProduct Fee
3.64% 4.99%5.99%5.7%60%£1999 View
Max loan amount £750,000 / Min loan amount £50,000 / £500 Cashback upon completion
3.69% 4.99%5.99%5.7%70%£1999 View
Max loan amount £750,000 / Min loan amount £50,000 / £500 Cashback upon completion
3.84% 4.99%5.99%5.7%75%£1999 View
Max loan amount £750,000 / Min loan amount £50,000 / £500 Cashback upon completion

5 Year Large HMO Fixed Rate Mortgages

Initial rate fixed up to and inc. 31/08/24Then the Society's BTL Variable Rate thereafter, (currently)Overall cost for comparison (APRC)Max LTVProduct Fee
3.74% 5.69%4.9%60%£1999 View
Max loan amount £750,000 / Min loan amount £50,000 / £500 Cashback upon completion
3.84% 5.69%5.0%70%£1999 View
Max loan amount £750,000 / Min loan amount £50,000 / £500 Cashback upon completion
RATES CORRECT AS AT 03 may 2019

Warning: Your home may be repossessed if you do not keep up repayments on your mortgage.

Representative Example

A mortgage of £300,000.00 payable over 25 years initially on a fixed rate for 2 years at 3.84% and then a 1.00% discount on our current Buy to Let Variable Rate of 5.99% for 3 years and then on our current Buy to Let Variable Rate of 5.99% for the remaining 20 years would require 24 monthly payments of £1,555.69, 36 monthly payments of £1737.03 and 240 monthly payments of £1,885.58.

The total amount payable would be £554,443.93 made up of the loan amount plus interest of £252,409.93 and application fee £0, product fee £1999, valuation fee £0, chaps fee £35.

The overall cost for comparisons is 5.5% APRC representative.

This representative example assumes a mortgage completion date on the 1st day of a calendar month.

The above representative example is for illustration purposes only and may vary depending on your personal circumstances.

Unless otherwise indicated, these products are only available for house purchases or for customers remortgaging from another lender. A product fee is payable on application but is refundable should the mortgage not complete. A mortgage exit fee of £199 will apply.

  • 10% capital repayments are allowed each year during the fixed rate period without incurring an Early Repayment Charge.
  • Tapered Early Repayment Charges apply.
  • Interest calculated daily.
  • Free standard valuation up to £999
  • Maximum loan £750,000.
  • Available for properties with up to and including 8 bedrooms and housing more than 6 occupants.
  • Available for properties in England, Scotland and Wales.

 

We have developed a set of short, easy-to-use guides to our criteria.

View our criteria guides »

Any questions?

Please contact your nearest Development Manager. Find your nearest Development Manager »

Please note:

Leeds Building Society only accepts mortgage applications from intermediaries where they are providing an advised sales service, with the exception of Buy to Let & Holiday Let applications. It is the responsibility of the intermediary to ensure that all applicable law including, without limitation, the Financial Conduct Authority rules on advised mortgage sales are complied with including, without limitation, the provision of adequate explanations.