If you’re thinking about investing in rental property through your company, you might be thinking, can a limited company get a buy to let mortgage?
Yes, most major and specialist buy-to-let lenders now offer limited company products, usually via an SPV. The application process looks at the company and the property rather than your personal income, though you’ll typically still need to give a personal guarantee. Buy to let mortgages for limited companies is a popular route for directors and business owners, but it works quite differently to a standard buy to let mortgage.
This guide covers how limited company buy to let mortgages work, why company directors choose this route, and what you need to know about rates, deposits and tax.
How do limited company buy to let mortgages work?
A buy to let limited company mortgage is a loan taken out by a limited company, not an individual, to buy a rental property. Most of the time, this is done through a Special Purpose Vehicle (SPV), which is simply a company set up to hold and let property.
The company owns the property, not you personally, unlike a Consumer Buy to Let mortgage, and it applies for the mortgage, collects the rent, and pays the lender. As a director, you’ll usually still need to give a personal guarantee, but the property itself sits on the company’s books, not yours.
If you’re already used to running things through a limited company, this can feel like a natural next step.
How to get a buy to let mortgage as a limited company
The starting point is usually the company structure itself, not the property. If you don’t already have a suitable company, most brokers will suggest setting up an SPV before you apply. It’s usually simpler for lenders to assess than an existing trading company.
Setting up an SPV means registering a new company with Companies House, so you’ll need to choose the right Standard Industrial Classification (SIC) codes which relate to buying, selling and letting property. Lenders like to see a simple, clean structure, especially for a first application.
Already run a trading business and want to hold property through it? That’s still possible, but fewer lenders will consider it. A specialist broker can tell you whether your existing structure will work, or whether a new SPV makes more sense – the kind of judgement call we help directors make daily, weighing your setup against what each lender on our panel will accept.
Why more landlords are buying through a limited company
Tax is the main reason more landlords are buying through a limited company. Since Section 24 of the Finance Act 2015 came in, individual landlords can no longer deduct mortgage interest in full from their rental income – higher and additional-rate taxpayers now only get a 20% tax credit instead.
Limited companies aren’t affected by this rule. A company can still deduct mortgage interest and other running costs from its rental income and profits are taxed under corporation tax, not income tax. For directors already paying higher-rate tax personally, that difference can add up over time.
There are other reasons directors choose this route, too. Some lenders cap how many mortgaged properties you can hold in your own name, but they’re often more flexible with a limited company, making it easier to grow a portfolio. A company structure also keeps rental income separate from your personal finances, which many owners prefer.
Limited company buy to let mortgage rates
Limited company buy to let mortgage rates tend to run a little higher than standard buy to let rates for individuals.
The rate you’re offered depends on a few things: your deposit size, your loan-to-value ratio, whether you pick a fixed or variable mortgage, and how strong your company’s application is. Fewer lenders offer limited company products than standard buy to let and many of the best limited company buy to let mortgage rates aren’t available to the public at all.
That’s why directors often work with a whole-of-market broker instead of going straight to one bank. Our advisers track these products daily across the whole market, so we can point you towards deals that suit your company’s structure, not just the ones sitting on the high street. Running a limited company buy to let mortgages comparison yourself can only get you so far, since much of the panel isn’t visible outside a broker.
Deposits and affordability checks
Deposit requirements are broadly similar to standard buy to let, so expect to put down 20–25% of the property value, though this varies by lender. Some specialist lenders accept lower deposits, but rates will usually be higher in return.
These mortgages sit outside FCA regulation, which means that affordability is assessed mainly on rental income, not your personal earnings. Lenders want to see that the expected rent covers a good margin above the mortgage payment.
As a director, you’ll still usually need to provide a personal guarantee alongside the company’s application. Your own credit history and financial position will be checked too.
Tax considerations for directors
Buying through a limited company changes how profits are taxed, but it doesn’t remove tax altogether. Rental profits sit inside the company and are taxed under corporation tax rather than income tax, so if you want to take that money out personally, whether as salary or dividends, further tax will usually apply at that point.
This means the overall tax efficiency depends on your circumstances. It comes down to how much you need to draw from the company, and your wider financial position.
Limited companies also don’t get the same Capital Gains Tax allowances as individual landlords when a property is eventually sold. Stamp duty still applies too, in the same way it would for a personal purchase, including the additional dwelling surcharge.
Is a limited company buy to let mortgage right for you?
The answer ultimately depends on your goals as a director or business owner. A limited company structure tends to suit landlords who:
- Are already higher or additional-rate taxpayers personally
- Plan to build a portfolio of several properties over time
- Want to keep rental income separate from personal finances
- Are comfortable with the extra company administration involved
It may suit you less if you’re buying one property with no plans to grow, or you’d rather avoid the extra reporting a company brings. Every situation is different. That’s exactly why speaking to a specialist, like Mortgage Saving Experts, makes such a difference before you commit.
Ready to explore buy to let mortgages for limited companies?
Buy to let mortgages for limited companies open up real opportunities for directors and business owners building a property portfolio. But, the right structure and lender depend entirely on your circumstances. As a whole-of-market broker, we have access to limited company buy to let deals you won’t find on the high street. We’ll give you straightforward advice based on your actual situation, not a one-size-fits-all answer.
Find out more about our buy to let mortgages to see what’s available to you, or get in touch today for a no-obligation conversation about your mortgage options.
Frequently asked questions about buy to let mortgages for limited companies
Can a limited company get a mortgage?
Yes, limited companies can get mortgages for residential investment, commercial premises, and other property types, not just buy-to-let. The criteria and rates vary depending on what the company is buying and how it’s structured, so it’s worth getting advice specific to your situation.
Can I transfer a property I already own into a limited company?
Yes, but this counts as a sale from you to the company, so stamp duty and potentially Capital Gains Tax may apply. It’s worth getting advice on the costs first.
Do I need a trading history to get a limited company buy to let mortgage?
Not usually, if you’re setting up a new SPV. Lenders focus more on the property, your deposit, and your own financial background as director.
Are limited company buy to let mortgages more expensive overall?
Rates and fees can be higher than personal buy to let mortgages, but the tax efficiency for higher-rate taxpayers can offset this over time. It comes down to your own numbers, which a broker can help you work through.
