HMO mortgage calculator
The most an HMO mortgage can lend is usually set by the combined room rent, tested at the lender's stress rate and cover ratio. Enter the rent, price and deposit to estimate that loan and compare it with the loan your deposit implies; figures are illustrative, not a quote or advice.
Reviewed by David Sampson, Founder & Director · Created 18 October 2026 · Last reviewed 18 October 2026
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What is an HMO mortgage?
An HMO mortgage is a specialist buy-to-let loan for a house in multiple occupation: a property let to three or more people from more than one household who share a kitchen, bathroom or toilet. Lenders add the rent from each room and test whether that income covers the interest by a set margin.
Deposits are often 25% for a small HMO and 30% or more for a large one (lender criteria, accessed 14 Oct 2026). You can buy in your own name or through a limited company. Licensing, planning and Article 4 rules affect what a lender will accept. This page estimates the loan from the figures you enter. It does not decide eligibility.
How this estimate is worked out
Combined rent is the monthly rent per room multiplied by the number of rooms, assuming every room is let. The maximum loan is that annual rent divided by the stress rate and the interest cover ratio, the interest-cover test UK buy-to-let lenders apply under PRA SS13/16.
As a worked example, with every input assumed: a five-room house at £550 a room produces £33,000 a year, and at an 8.5% stress rate and 145% cover that rent supports about £268,000. Each lender sets its own stress rate and cover ratio within the PRA's buy-to-let underwriting rules (PRA SS13/16).
The loan at your deposit is the price minus the deposit. The monthly figure is the interest-only payment on that loan at the rate you type. Gross yield is annual rent divided by the purchase price. If the rent cover at the stress rate is below the ratio you set, the result is marked short of cover.
What this leaves out: empty rooms, council tax, bills, furnishing, management, licensing, maintenance and tax. One empty room reduces the rent a lender will use. Read how HMO mortgages work for licensing and Article 4.
Frequently asked questions
How much deposit do I need for an HMO mortgage?
Lenders often ask for 25% on a small HMO, and 30% or more when there are seven or more rooms, so the maximum loan-to-value is often 75% or lower. These figures are typical and vary by lender (lender criteria, accessed 14 Oct 2026). This calculator uses the deposit you type. It does not confirm a lender will agree it.
How do lenders test HMO rent?
They add the rent from every room and check it covers the mortgage interest by a set margin, called the interest cover ratio. Cover is often 125% to 175%, tested at a stressed rate rather than only the rate you pay (lender criteria; PRA SS13/16, accessed 14 Oct 2026). The ratio varies by lender, tax band and whether you buy through a company.
What does this calculator estimate?
The maximum loan the combined room rent can support at the stress rate and cover ratio you enter, next to the loan implied by the price and deposit. The monthly payment is interest-only. It excludes empty rooms, bills, management, licensing and tax. It is not a quote or advice.
Do limited company HMO mortgages use a lower cover ratio?
Often yes. Many lenders apply a lower cover ratio to a limited company purchase than to a higher-rate taxpayer buying in their own name, and some specialist lenders set their own, higher ratios. The ratio varies by lender, so if you have a quote, type that ratio in.
What is a small HMO versus a large HMO?
A small HMO is usually three to six people and sits in planning use class C4. Seven or more occupants is sui generis and often needs planning permission and a larger deposit. In England, five or more people from two or more households need a mandatory HMO licence.
Related articles
Practical guides and explainers from our blog — relevant to this mortgage type.
Landlord Fined £35,000 for HMO Violations
A landlord in St Helens has been fined £35,000 for HMO violations, highlighting the importance of compliance with housing regulations.
HMO Landlords Invest Despite £10,000 Costs
HMO landlords are investing significantly in property improvements despite rising costs, with many planning to expand their portfolios.
Planning Refusals for HMOs Surge: Impact on the Mortgage Market
HMO planning refusals have more than doubled since 2021, impacting landlords and tenants in the UK mortgage market.
HMO Planning Refusals Double: Impact on the Mortgage Market
HMO planning refusals have doubled since 2021, impacting landlords and the mortgage market significantly.
Assumptions
Updated 2026-10-18Interest-only. The monthly payment is interest on the loan implied by your deposit.
Combined rent is room rent times the number of rooms, assuming every room is let.
Maximum loan is annual rent divided by the stress rate and the cover ratio.
The starting stress rate is 8.5%: a 6.5% pay rate plus 2 percentage points. Both fields are yours to change.
Switching buyer type sets cover to 125% (basic-rate or limited company) or 145% (higher-rate).
The cover test follows the interest-cover approach UK buy-to-let lenders use under PRA SS13/16. HMO criteria still vary by lender, property size and experience. Figures are illustrative only.
Important: Your home may be repossessed if you do not keep up repayments on your mortgage. Information on this page is for general guidance only and does not constitute financial advice.Always verify details directly and seek independent advice before making financial decisions.