On 5 November 2026 the Bank of England raised Bank Rate by 0.25 percentage points to 4%. Two days earlier, specialist lender Fleet Mortgages launched a five-year fixed range carrying a 5% product fee, up to 75% LTV, which includes its HMO and multi-unit freehold block (MUFB) products. Higher-fee, lower-rate deals like these are becoming a common way for lenders to help landlords pass rental stress tests.
Why bigger fees are showing up on HMO deals
Most buy-to-let and HMO lenders test affordability with an interest cover ratio (ICR): the rent must cover the mortgage interest by a set margin at a stressed rate. A lower pay rate can help a larger loan pass that test. The trade-off is the fee, which on a 5% product is £5,000 for every £100,000 borrowed.
Fleet says the fee can be added to the loan at completion, subject to criteria, and its HMO/MUFB product also comes with £1,000 cashback. Adding a fee keeps cash in your pocket on day one, but you then pay interest on it for the life of the loan.
How to compare a high-fee deal with a low-fee one
The rate on its own does not tell you which deal is cheaper. Compare the total cost over the fixed period: all interest paid, plus arrangement and product fees, valuation and legal costs, minus any cashback. A high-fee deal often works better on larger loans and longer fixes, while a lower-fee deal may suit smaller loans or landlords who expect to sell or refinance early. Check the early repayment charges too, as five-year fixes usually carry them for most of the term.
For HMOs there is more to weigh than price. Lenders look at the number of bedrooms and lettable rooms, your experience as a landlord, the licence position, and whether the property is valued on bricks and mortar or on its rental income. The right lender for your property is not always the one with the lowest headline rate.
Licensing still comes first
Larger HMOs (five or more people forming more than one household) need a mandatory licence from the council, and many councils run additional licensing schemes for smaller HMOs too. Lenders will usually ask for the licence, or proof that one has been applied for, before they lend.
Quick tips
- Ask for the total cost over the fixed period on every option, not just the pay rate.
- Remember that a fee added to the loan accrues interest and increases your loan-to-value.
- Check the early repayment charges if you might sell, refinance or restructure within five years.
- Have your HMO licence, tenancy schedule and rent roll ready before you apply.
- If your fix ends in the next six months, start reviewing options now; many lenders let you secure a deal in advance.
Run your numbers through our buy-to-let calculator, see how we arranged a first six-bed HMO in Nottingham, and read our free property licensing guide. For lender options on shared houses, see our HMO mortgages page. Most buy-to-let and HMO mortgages are not regulated by the FCA.
Sources
- Bank of England: Bank Rate raised to 4% (5 November 2026)
- Mortgage Solutions: Fleet, The Tipton and The Mortgage Works enhance BTL propositions (3 November 2026)
- GOV.UK: House in multiple occupation licence
To talk it through, contact us or start your enquiry.
Important: This guide is general information, not personal advice. Rules, rates and lender criteria change; speak to an adviser about your circumstances. Your home may be repossessed if you do not keep up repayments on your mortgage.