New mortgage for HMOs based on licensing and EPC rating

Pepper Money has launched a new mortgage product tailored for Houses of Multiple Occupation (HMOs), aimed at landlords and limited companies with at least 12 months of homeownership experience. The product allows financing or refinancing of HMOs with up to six bedrooms, provided they are appropriately licensed at completion.

Key features include:

• Available for portfolios of up to 10 properties.
• Interest rates starting at 5.19%, with a 75% Loan-to-Value (LTV) cap.
• Properties must have an Energy Performance Certificate (EPC) rating of A-C.
• Affordability is assessed based on rental income, without requiring personal or business bank statements.
• Deposits can come from multiple sources, including gifts, director loans, and existing equity.
• Credit scores are not used in application assessments.
• Loan terms extend up to 35 years, with lending available to age 85.

Pepper Money emphasizes a human approach to underwriting, considering broader financial factors beyond rental income and credit scores. The lender aims to support landlords navigating an increasingly complex regulatory environment while ensuring responsible lending practices.