5-Year Fixed Rate HMO Remortgage for a UK Landlord

5th March 2024

Fergus Shires

Fergus Shires

Fergus Shires

Key Details:

  • Client: UK Landlord
  • Property Value: Circa £1,000,000
  • Mortgage Amount: Approx. 700,000

We were re-approached by a repeat client with whom we have previously structured various borrowing options. The client has a substantial portfolio of properties and regularly needs to review finance options. This large HMO (house in multiple occupations) property was one of their best-performing assets.

Interest Rates in the UK have increased significantly over the past two years, and many UK landlords are seeing their monthly payments double when it comes to remortgaging. Those with multi-million-pound investment portfolios focus on keeping monthly interest payments low so that the business can continue to benefit from a healthy cash flow. Another focus for portfolio landlords is to add value to their investment properties so that when it comes to remortgage, they can raise capital and continue growing the business. With rate increases, this has made it more challenging to raise capital as affordability is lower.

Many opt for a higher product fee and a lower rate to minimise monthly interest payments in the current market. Though the product fees are sizeable upfront, professional landlords can view it as spreading the cost across the fixed rate term and also that it is offset by the capital appreciation of the property over that exact term. For this client, we secured a 5 Year Fixed Rate of 4.7% with a 5% product fee added to the mortgage, allowing them to maintain similar monthly interest payments to their previous mortgage facility.

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