Mortgages for limited companies

Buy to let mortgages for limited companies

Investing in property through a limited company

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What is a Limited Company BTL Mortgage?

A Buy-to-let mortgage is a mortgage for a property that is intended to be rented out. A Limited Company Buy-To-Let mortgage is arranged through the limited company as opposed to an individual. The company is the owner of the property and is responsible for the mortgage, the management of the property and all taxes associated with it.

Limited company buy to let in a nutshell

A Buy To Let Investment Through a Limited Company

There are two ways to purchase an investment buy to let property – as an individual or through a limited company. A limited company BTL mortgage allows you to borrow the money needed for the purchase as a company, where the company is responsible for the mortgage payments. The limited company will also be the owner of the property and be responsible for the management of the property and all activities associated with running the rental property business.

What is Limited Company SPV?

An SPV or a Special Purpose Vehicle is a limited company that is created solely for a specific purpose, in this case owning a rental property. It is used to purchase and rent out properties. In most cases, the limited company has to be a non-trading company, which means it shouldn’t have any other activities bringing profit other than the rent. For example, if you have another business that is a consulting or a property management company, these companies shouldn’t be the owners of the investment property as it can complicate getting a mortgage. Some lenders would accept trading companies but generally, lenders would prefer a non-trading company.

Tax Advantages of Owning Property through Limited company

One of the biggest drivers for the recent growth in limited company buy to lets has to be the tax landscape. Many will know the term Section 24 (no 2 Finance Act 2015), which was implemented in April 2017. Section 24 removed a landlord’s ability to fully deduct mortgage interest and other costs from their rental income before calculating the tax liability. Instead, the new tax relief was created and restricted to the basic rate of tax. This meant that landlords who were higher and additional taxpayers were hit with additional tax liability.

How We Can Help You Get Buy To Let Mortgage for a Limited Company?

Whole of market

We have access to over 90 banks and specialist lenders.

75% LTV

Deposits from 25%. Directors loans and inter-company loans acceptable.

Term from 2-years-fixed

We can advise on the best deals currently on the market.

Borrow up to £2m

Our lenders offer mortgages from £25,000 to £2m.

Free initial consultation

Free initial consultation and fixed fees to arrange a mortgage.

Tailored to your needs

Mortgages available with no minimum income, age up to 85 years old, or limited companies.

Buy-to-let calculators

BTL Rental Income Ratio Calculator

Calculate a minimum income required for you buy to let property investment.

Stamp Duty Land Tax Calculator

Calculate how much you would pay in Stamp Duty Land Tax based on the property price.

We work with over 90 lenders

From high-street banks to specialist finance providers

Common questions about Buy-to-Let mortgages

Most frequent questions regarding a buy to let mortgage

Buy to let

An investment buy-to-let mortgage is when a person buys property as an investment, rather than a place to live. This type of mortgage is more likely to be interest-only and will require a higher deposit, at least 20%. There is also a requirement for the rent to cover the mortgage payment and other fees associated with the property.

A consumer buy-to-let mortgage is when a person becomes an ‘accidental landlord’. This is due to circumstances, rather than intentional investment. This can happen in several situations: inheriting a property, moving abroad for work and leaving the house to be rented out, intending to sell but it is difficult to sell the property. These mortgages are regulated mortgages (unlike investment buy-to-let mortgages) and fall under the same regulations as residential mortgages. If you think you fall in this category, give us a call and we can discuss your requirements.

The minimum deposit for buy-to-let property is 20%. However, we would recommend a 25% deposit to achieve a better interest rate.

The rental cover ratio shows how much the rental income covers the mortgage payments. A rental cover ratio of 1.5 or 150% would cover the mortgage payment by 150%. The minimum rental income calculation is based on the annual stress rate (typically 5.5%) and depends on your taxpayer status. We have developed a simple Rental Income Calculator to give you indicative minimum rental income required to cover your mortgage payment.

Yes, you can purchase an investment property through a limited company, which is called a Special Purpose Vehicle. This limited company needs to be registered with Companies House, have at least one director and be a non-trading company. This means the company has no other purpose just to own the property and rent it out for profit. There are many tax benefits to owning a buy to let property through a limited company. You can read more in our blog post here.

An SPV, or a Special Purpose Vehicle, is a way of investing in property through a limited company. The company owns the properties and pays dividends to directors. The biggest advantage of holding properties in SPV is tax treatment. This allows a company to offset mortgage payments against income tax. It is also allowed to buy and sell shares in an SPV to raise capital, rather than sell the property itself. Find out more in our blog post here.

An HMO, or Houses in Multiple Occupation is a property rented to at least 3 tenants that share common areas, like kitchen and bathroom. A large HMO is when at least 5 tenants occupy a property. Many councils introduced HMO licences, so please check with your council about the rules and obligations as a landlord.

We would strongly recommend a landlord’s home insurance. The landlord insurance not only covers the walls, roof, permanent fixtures and fittings but also can cover the loss of rent in case of an insured event, change of locks if keys are lost or stolen or malicious damage caused by the tenants to the buildings.

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