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HMO Maximum Loan-to-Value (LTV)

HMO Maximum Loan-to-Value (LTV)

What deposit is needed? (85% LTV HMO)

HMO Mortgages are available up to 85% LTV for Purchase or Remortgage. That's just a deposit of 15% of the property value. 85% LTV Buy to Let Mortgages are the highest LTV you can get as a property investor.  Landlords looking for leveraging prefer an 85% HMO Mortgage. In 2017 only one Buy-to-Let lender KRBS offered 85% LTV Mortgages. In 2018 they joined by Kensington Mortgages and Vida Home Loans in 2019.

What is an 85% LTV HMO Mortgage?

Loan to Value (LTV) is the mortgage amount percentage of the total value or purchase price. You can borrow up to 85% of the value of an HMO Property. As an example on a property worth £100,000. With an 85% LTV HMO Mortgage you can borrow up to £85,000. That means just a deposit or equity of £15,000. Mortgage Lenders consider 85% LTV as high risk giving us few options. The higher risk and fewer options are reflected in the mortgage rates and fees charged. Whilst 85% LTV HMO Mortgages are available. The maximum loan is still constrained by affordability, mainly the rent achievable.

What are the benefits of 85% LTV HMO Mortgages?

HMO mortgages at 85 LTV are the highest property investors can obtain. Higher loan to value is not available for Buy-to-Let investors. On purchases, you can buy a property with very little deposit. Helping you to expand your portfolio. On remortgages, you can raise capital from your property. Enabling you to use funds elsewhere such as a renovation or expanding your portfolio.

Can you borrow up to 85% LTV of the Property Value?

The affordability of a Buy-to-Let Mortgage is based on the rent that is achievable.  It can be difficult for landlords to reach a rental stress test of 85%. Completing the mortgage on a Five Year Fix and/or Limited Company may open up more options. Our mortgage advisers will be able to guide you in this. For illustrative purposes only. On a mortgage of £170,000 with the Kensington Product, you would require £974 rent and £1090 from KRBS.

85% LTV Mortgage Criteria

  • Available for Houses in Multiple Occupation (HMOs)
  • Available for Multi-Unit Blocks.
  • Available for Limited Company Buy to Let.
  • Available for Trading Companies.
  • Available in England, Wales, Scotland and Northern Ireland.
  • No Minimum Income.
  • Interest Only or Repayment.
  • Minimum 1 Year Landlord Experience Required

Can you get 85% LTV HMO Mortgage in a limited company?

The products available are for Personal Name or in a Limited Company Buy-to-Let if purchasing in a Special Purpose Vehicle (SPV). Trading Companies differ.

Are HMO Mortgages regulated?

HMO Mortgages are not regulated by the Financial Conduct Authority (FCA). These are classed as commercial mortgages.



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