Limited company buy-to-let mortgage
You just found a specialised mortgage broker to advise you on limited company mortgages.
Securing a buy-to-let mortgage through a limited company can be more unusual than arranging a standard buy-to-let, as there are fewer lenders in the field, and the requirements in the application can be different.
But you are in the right place because:
- We can advise you on securing mortgage finance for a new limited company if you haven’t already got one.
- We work with a range of specialist lenders who offer limited company buy-to-let mortgages to special purpose vehicle (SPV) entities and trading businesses.
- We are experts in buy-to-let and limited company buy-to-let arrangements and can support landlords through every stage of their investment journey.
What is a limited company mortgage
A limited company mortgage is a mortgage taken for investment purposes by a limited company as opposed to you as an individual.
A mortgage can be taken by a limited company specifically set up to hold residential property, also known as a Special Purpose Vehicle (SPV). A mortgage can also be taken out by a limited company that is used for other business activities, such as a dental practice or an accounting practice.
In both cases, the company will be raising funds to purchase a property to let as an investment.
As a company mortgage can also be obtained for a Limited Liability Partnership (LLP) or a Trust, our specialists have access to lenders that provide financing to these types of company structures as well.
A Special Purpose Vehicle is the most common type of company structure and is set up solely for the purpose of buying, selling, and letting properties. It cannot be diversified to other areas of business.
Benefits of a limited company buy-to-let mortgage
Many landlords choose to operate their investment portfolio through a limited company SPV as it offers a range of benefits not available to independent landlords:
- Tax benefits – a limited company can be an efficient way to reduce your tax bill from your property business, especially if you are a higher or additional rate taxpayer. Savings can be made both through paying corporation tax (which is at a lower rate than income tax) and due to tax-deductible charges that are not available as an individual landlord, such as mortgage interest*.
- Deposit availability – it is possible for a landlord to lend a director’s loan to the limited company to pay for the deposit on investment properties.*
- Joint investment – It can be an easy way to own multiple properties with other landlords.
- Separating financial business risk from personal liability – A limited company is a separate legal entity, so all properties owned by it are treated as separate assets. By owning property in a limited company, you will remove personal liability and personal property risk from business dealings. However, please note that some lenders may require a personal guarantee from you.*
*Please consult an accountant to offer you personal tax advice.
Eligibility for a limited company mortgage
To get a limited company buy-to-let mortgage, you will need an SPV already set up, or you will need to be willing to set one up alongside the mortgage application process. We provide advice from the whole mortgage market, so we are always up to date with the best mortgage rates for limited company buy-to-let mortgages.
For a limited company buy-to-let mortgage application, your limited company must be registered as a special-purpose vehicle using one of the following SIC codes:
- 68201 Renting & operating of housing association real estate
- 68209 Other letting & operating of own or leased real estate
- 68320 Management of real estate on a fee or contract basis
- 68100 Buying & selling own real estate
Other criteria are generally the same as a traditional buy-to-let standard mortgage, although some lenders impose a maximum number of directors on the limited company, usually four. Whether you are buying your first property or growing your portfolio, we can offer you the best limited company buy-to-let mortgage range of options for your specific situation.
Limited company buy-to-let mortgage rates
Limited company buy-to-let mortgages can offer even more benefits for experienced and portfolio landlords, as some lenders offer specific products to landlords owning four or more buy-to-let properties.
As with any other mortgage type, your circumstances can impact the rates you get, as well as the LTV (loan to value) of your borrowing. The property will also be considered and may also be deemed a higher or lower risk, which may have an impact on the interest rate you are offered.
Applying for a limited company mortgage with us
Here, at Home of Mortgages, we specialise in buy-to-let purchases and SPV mortgages, so we can guide you through the application process and answer all your questions about this unique process.
We have access to a range of lenders who can offer buy-to-let mortgages via a limited company, which means we can compare them easily to secure the best rate in the market for you.
Limited company buy to let mortgage FAQs
What are the advantages of using a limited company for your buy to let mortgage?
Using a limited company for a buy-to-let mortgage in the UK offers several advantages. Firstly, it provides limited liability protection, safeguarding your personal assets from the property's liabilities. Although the majority of lenders will request a personal guarantee from you.
Secondly, it can be more tax efficient, allowing for deductible expenses, reduced personal tax liabilities, and full mortgage interest relief. Using a limited company structure facilitates portfolio expansion and provides flexibility for inheritance planning. It also projects a professional image, potentially attracting more tenants and business partners. However, it is important to consider the need for professional advice. Consulting with an accountant is essential to make informed decisions based on your specific circumstances.
Can I transfer personally held properties to my new SPV limited company?
Transferring personally held properties from your name to an SPV limited company, presents a great financial opportunity for property investors. By seeking professional guidance from an accountant, you can navigate the process with confidence.
Your accountant will advise you whether your transaction will be either a sale by you and then a purchase from the limited company (which will likely incur capital gains tax and stamp duty to be paid) or whether you are able to use any form of incorporation relief.
Incorporation offers benefits such as enhanced asset protection, tax efficiency, and the ability to expand property portfolios. With proper property valuation, consideration of Stamp Duty Land Tax (SDLT) and Capital Gains Tax (CGT) implications, and obtaining lender consent, investors can streamline their operations and take advantage of operating under a limited company structure. The guidance of professionals ensures compliance with legal requirements and maximises the potential for success in the property investment journey.
Get a free same-day mortgage quote
Remember | Your home may be repossessed if you do not keep up repayments on your mortgage.
Not all Buy to Let Mortgages are regulated by The Financial Conduct Authority.