We were approached by a client who has been using Mortgages for Business for more than 15 years. In this time he has built up a property portfolio of 10+ rental properties.

The client wanted to turn one of his properties; a six-bed house, into a HMO because the rental income was stronger.

 The property value had increased since purchase so we were able to improve the mortgage rate and raise a significant sum of capital for further investment. 

We approached a lender that accepts HMOs.

It was able to offer a rate that wouldn't increase his monthly payments greatly.

Here are the deal details:

Property value: £425,000

Loan amount: £265,000

LTV: 63%

Rate: 3.34% 2 year fixed

Term: 25 years interest only

Lender arrangement fee: £995

Mortgage payments: £738 pcm

Rental income: £2,430 pcm

Gross yield: 6.9% pa

Consultant: Chris Longhurst