Limited Company HMO Mortgage
- Access to competitive rates and some you can't get direct
- No need to spend hours researching the market
- Relax knowing you have the best advice
Straightforward mortgage advice from expert brokers. Finding the perfect mortgage just for you without the jargon.
What's On This Page?
Get In Touch
Limited Company HMO Mortgage
Can I get an HMO mortgage through my limited company? What criteria does a limited company need to meet for an HMO mortgage?
Yes, you can get an HMO mortgage as a limited company. In fact, it’s probably more common to do it that way.
If you are in the position financially and mindset-wise to be looking at an HMO, you’re probably a higher rate taxpayer. Also, an HMO isn’t usually what you would choose as your first venture for a second property.
The tax benefits for a limited company are far better, particularly with an HMO, because the income is potentially much more than on a normal property rented out to a single family. If you’re not already a higher rate taxpayer, you will be in no time – so a limited company mortgage is probably the way to go.
The general criteria are the same as a non-limited company mortgage. If you’re purchasing an HMO, you can do it with a brand new limited company. The lender’s looking at you, not the actual legal entity that’s going to own the property. The company could just be yourself, or you and a business partner or investor.
You might buy an HMO that’s already done or you might buy a property and convert it. We do these quite a lot, particularly buying and refurbishing a property to turn it into an HMO and then refinancing it afterwards.
The criteria is generally straightforward. Sometimes you need to earn a certain amount to get an HMO limited company mortgage, but with some lenders that doesn’t matter. We don’t need to stress too much about that at this stage.
How much deposit does a limited company need for an HMO mortgage?
25% is generally the guide. An HMO’s rental income will be quite a lot more, and the rate is more as well. The rental calculation stress test the lender uses usually works best with a 25% deposit.
There are lenders that advertise a 20% deposit, but that always doesn’t always work with stress tests.
What’s the benefit of getting an HMO mortgage instead of a Buy to Let through a limited company?
If the property is an HMO, you need an HMO mortgage. You shouldn’t take a standard Buy to Let mortgage on an HMO – so the benefit is that you won’t get into trouble.
Can I get an HMO mortgage under a limited company as a first time landlord?
If you’ve never owned a property before, that would be tricky, honestly. One lender might do it, but they are very specialist. However, if you already own another property and you’re a first-time landlord, but not a First Time Buyer, that’s fine.
What if the limited company has poor credit? Could I still get an HMO mortgage?
Yes, potentially. As always, it really depends on how bad the credit is. I’ve had cases recently where a client’s company has just had a county court judgment (CCJ) but it’s an admin error.
It’s a scrupulous process if the issue is fresh and new. We have to choose a specialist to get that sorted out. But something less serious five years ago is not an issue to a lender. It really depends on the severity and the timing.
Speak To an Expert
Can I remortgage my HMO properties into a limited company? How does this work?
I’m assuming this means owning a property personally and moving it into a limited company.
You can absolutely do that. Unfortunately, though, it’s not a remortgage – it’s a purchase. The legal entity that owns the property is changing from one ownership to another.
You have to sell it to your company, which means the business has to pay stamp duty. I’ve got people who started buying properties years ago, before the tax position changed. Over time, we are gradually moving their portfolio into the limited company.
In some cases it’s possibly not worth it because of that stamp duty. If you’re in your 50s and you’re planning to retire in a few years’ time, moving a portfolio of properties into a limited company and paying all the stamp duty might not make financial sense. You won’t recoup that stamp duty with the tax savings you’ll have.
But if you’re 30 to 40 and you’ve got 20 years of tax ahead of you, the saving is probably worth it, so you might choose to move the property into a limited company. It’s different for everyone and it’s best to get advice from an accountant.
Is it worth buying an HMO property? What are the pros and cons of an HMO mortgage through a limited company?
On the whole, I would say it is worth it. It does depend where you are and if there’s a market for it. Where we’re based, there are a lot of HMOs around but I’m not sure we need that many more.
In bigger towns and cities with universities, HMOs are popular as student lets. You need to be confident you can rent your rooms out. If you’ve always got one empty, that’s not great for your turnover. Having long periods of empty rooms is to be avoided – you need all the rooms let, all of the time.
It takes a lot more management to run an HMO. If you’re letting out a house to a family, barring any major disasters, they’re going to pay their rent each month and hopefully stay for a few years. People come and go more often with an HMO.
You have to be on top of rent collection – so either you pay someone to do that and they charge more because there’s a lot of work involved, or you do it yourself. But the reward is that your income is more than with a normal Buy to Let.
I have clients who let HMOs to the council, for vulnerable people, victims of domestic abuse or those with special needs. It can be good to get in with a council. You might not get necessarily as much rent, but it’s guaranteed income for a set amount of time. The council might sign up for five years, for example, and they might even maintain the property too.
There are lots of pros and cons and considerations. You don’t just wake up on a Tuesday morning and decide to buy an HMO. You need to do your research.
Are HMO mortgages more expensive through a limited company? What costs are involved with an HMO mortgage?
There are no other costs on top of what you would expect for a mortgage. You’re going to have a valuation fee if you’re buying, although the odd lender may offer a freebie. There are solicitors’ costs, and the interest rate is going to be higher on an HMO.
If you’re buying a property through a limited company, at the moment in August 2025 the rates are around 1% higher than doing it personally. But then you’re going to pay tax on the income, so if you’re a higher rate taxpayer, that’s not good. They are more expensive through a limited company than personally, but it’s often worth it.
How do I get an HMO mortgage as a limited company? How can a mortgage broker help?
Just speak to a mortgage broker. You can’t Google the best mortgage lender for an HMO – you’ll get lots of varying opinions. There isn’t one lender that’s best. There are many providers to consider, and it depends who’s most cost-effective for you.
They all have different criteria and things they do and don’t like, including types of properties. It can be a minefield. The more specialist we get – like in this area – the more you need to speak to a mortgage broker. It’s important to get proper advice on this.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.
For specialist tax advice, please refer to an accountant or tax specialist.
The information contained within this article was correct at the time of publication but is subject to change.
Useful Links
Why Vantage?
- Always the perfect mortgage for you
- No need to spend hours researching the market
- Relax knowing you always have the best deal