A limited company buy to let mortgage is a mortgage taken out by a company rather than a person. The company owns the rental property, the tenants pay rent to the company, and the company pays the mortgage. You, as one of the company directors, run it and usually give the lender a personal guarantee. Most landlords who go down this route use a special purpose vehicle, or SPV. That is simply a limited company set up with the sole purpose of buying and letting property. Lenders like SPVs because they are easy to understand: no other trading, no other debts, just the properties and the rental income.
Our limited company mortgage advice is always fee free. We are paid a procuration fee by the lender when your mortgage completes, and we never charge our clients a broker fee on top. Full details of how we are paid are always given in writing before you apply.
Before 2017 most landlords bought in their own name. Then the rules on mortgage interest relief changed, and for higher rate taxpayers a buy to let investment held personally can now make very little profit once tax is paid. A company buy to let works differently, and that is the main reason limited company mortgages have grown so quickly. Here is the honest picture, with the downsides as well as the upsides.
When you own real estate personally, you can no longer deduct mortgage interest from your rental income before tax. Instead you get a basic rate tax credit of 20%. A limited company deducts the full mortgage interest as a cost of doing business, so it only pays tax on the actual profit left over.
A company pays corporation tax on its rental profits. At the time of writing the small profits rate is 19% on profits up to £50,000, rising to 25% above £250,000, with marginal relief in between. Compare that with 40% or 45% income tax for a higher or additional rate taxpayer holding the same property in their own name.
This is the bit people forget. Profit inside the company is not yours until you take it out, and paying yourself a salary or dividends can trigger personal tax on top of the corporation tax already paid. If you plan to live off the rental income, the saving can be much smaller than the headline numbers suggest. If you plan to reinvest and grow a property portfolio, it can be very efficient.
Companies pay the additional property stamp duty surcharge on every purchase, just as individual landlords do on second properties. When selling, a company pays corporation tax on the gain with no annual exempt amount, whereas an individual pays capital gains tax with a small annual allowance. Neither is automatically better, it depends on your numbers.
Transferring an existing rental property into your own limited company counts as a sale. That can mean capital gains tax, stamp duty and early repayment charges on your current mortgage all at once. It is rarely worth it for one or two properties, though portfolio landlords who run their lettings as a genuine business sometimes qualify for incorporation relief. Please take proper tax advice before doing this.
Take a £250,000 property with a £187,500 interest only mortgage, rent of £1,350 a month (£16,200 a year), mortgage interest of £10,300 a year and a landlord who pays higher rate tax.
| Each year | In your own name | Through a limited company |
|---|---|---|
| Rental income | £16,200 | £16,200 |
| Mortgage interest deducted | £0 (20% tax credit instead) | £10,300 |
| Other allowable costs (say) | £1,900 | £1,900 |
| Taxable profit | £14,300 | £4,000 |
| Tax due | £5,720 at 40%, less £2,060 tax credit = £3,660 | £760 at 19% corporation tax |
| Profit left after tax | £340 | £3,240 (before any tax on drawing it out) |
Figures are rounded and for illustration only. Tax rates and allowances change, and your accountant can run your real numbers.
We are mortgage brokers, not accountants. The tax points above are general information, not advice on your personal circumstances. We work alongside your accountant, or can introduce you to one, so the mortgage and the tax planning fit together. Call 03300 432 428to talk it through.
Every lender has its own criteria, but they all look at the same handful of things. Here is what we check before choosing where to place your application, so it goes to a lender that will say yes first time.
Lenders stress test the rent against the mortgage interest. For a limited company the income coverage ratio is usually 125%, which means the rent must cover 125% of the interest at a stressed rate. Individuals paying higher rate tax are often tested at 145%, so a company can sometimes borrow more against the same rent.
Most lenders cap limited company buy to let mortgages at 75% loan to value, so you need a 25% deposit. A few go to 80%. The deposit can come from your own savings lent to the company as a director's loan, which is normal and expected.
Limited company products usually carry slightly higher interest rates than personal buy to let, and product fees can be a percentage of the loan amount rather than a flat fee. We compare the true cost over the fixed rate period, not just the headline rate, and we check the variable rate you would revert to as well.
Terms of 5 to 35 years are common, and many lenders will lend into retirement for a company because the rent, not your salary, is paying the mortgage. Maximum ages at the end of the mortgage term still apply to the personal guarantors, so we check every director.
Even though the company is borrowing, lenders underwrite the people behind it. They will look at your credit file, your existing commitments and other income streams, and sometimes ask for a minimum personal income, often around £25,000 for at least one director.
Standard houses and flats are the easiest to place. Houses in multiple occupation, multi unit blocks, flats above shops and ex local authority properties all work with the right lender. The property needs an EPC rating of E or better to be let legally, and lenders increasingly favour C or above, so an older property may need a plan for improvements.
Enter a rough purchase price, deposit and expected monthly rent to see whether the rental income would cover the mortgage at a typical lender stress test. It uses a 125% income coverage ratio by default and lets you change the stress rate to match different lenders.
For illustration only and not financial advice. Every lender uses its own stress rate and coverage ratio, and the maximum loan also depends on the property, the company and the directors. Your property may be repossessed if you do not keep up repayments on your mortgage.
There is no legal limit on how many properties a limited company can own, and there is no cap on how many limited company buy to let mortgages you can have across one or more companies. What changes is how lenders treat you. Once you own four or more mortgaged rental properties, in any name, you are classed as a portfolio landlord. Lenders must then look at your whole portfolio rather than just the new purchase: total borrowing, overall loan to value, the rental income across every property and a short business plan for how it all hangs together. Some lenders set their own maximum, for example ten properties or a few million pounds of lending with them, while specialist lenders have no upper limit at all. If you are building a sizeable property portfolio inside a company we can plan ahead so you do not run out of lenders halfway through.
Limited company buy to let mortgages are brilliant for some landlords and a needless complication for others. Here is how we tend to see it, though your accountant should have the final say on the tax side.
There is no single right answer. What we can do is show you the mortgage side of both options, side by side, and work with your accountant on the rest. If you decide to stay in your own name, our standard buy to let mortgage adviceis just as fee free. If you already own rental property and want to restructure, our buy to let remortgagepage explains how releasing capital from an existing property can fund the next purchase, and our stamp duty calculatorshows the additional costs to budget for.
We are FCA authorised intermediaries with over 20 years' experience in residential and buy to let lending, and we have arranged company mortgages for everyone from first time landlords to portfolio landlords with dozens of properties. This is how it usually goes.
We talk through what you want to buy, whether the company exists yet, who the directors and shareholders are, and roughly what rent it will earn. If you are a company director buying your own home instead, our mortgages for limited company directorspage is the one you want.
If you have not set up the company yet we explain exactly what lenders need: a UK registered company, the right SIC codes at Companies House and a business bank account. If it already exists we check the shareholding, the SIC codes and the filing history so nothing trips up the application later.
We research the whole market, pick the lender whose criteria fit your company and property, and secure a decision in principle so you can make offers with confidence. If you are buying your first rental property, have a read of our first time buyer buy to letguide too.
We package everything the lender wants, including company documents, director ID, bank statements and the personal guarantee paperwork, and chase it through to a formal mortgage offer. You get one point of contact and honest updates, even when the news is that the valuer is running late.
Your solicitor completes the purchase in the company name. We diarise when your fixed rate ends and get in touch before it does, so you are never stuck paying a lender's variable rate by accident. When you are ready for the next property, we already know your company inside out.
Call us on 03300 432 428, or send us a messageand we will call you back. No fees, no pressure, just clear advice from a broker who does this every week.
Limited company lending sits alongside the rest of our buy to let advice. These guides cover the other things landlords ask us about most, from fixed rate products to portfolio landlord rules.
Fixed rate BTL mortgages lock in your interest rate for a set period, keeping monthly costs predictable. Tracker mortgages follow the Bank of England base rate and often carry lower early repayment charges, ideal if you want more flexibility.
Own four or more mortgaged buy to let properties? You are a portfolio landlord. Lenders must assess your entire portfolio (total borrowing, rental income and void periods) at each new application. We help you navigate the criteria.
Want to keep your current home and move on? A let to buy mortgage converts your existing property into a buy to let, releasing equity to fund your new purchase. We arrange both mortgages together as part of the same process.
It is possible to purchase a buy to let property as your first ever property. Lender criteria differs from a standard residential application. We explain what is involved and which lenders will consider first-time landlords.
Standard home insurance does not cover missed rental payments, tenant damage or landlord liability. Specialist buy to let insurance, or portfolio cover for multiple properties, protects your investment properly.
Under the Rent Act 1977, some tenants have the right to remain in a property even if it is sold. Sitting-tenant properties are often priced lower, but many mainstream lenders will not finance them. We know which specialist lenders will.
Typically 25% of the property value, so a 75% loan to value mortgage. A handful of lenders go to 80%. The deposit is usually lent to the company by the directors as a director's loan, which the company can repay to you later without tax once the profits allow.
Yes. Several lenders will lend to a brand new SPV with first time landlord directors, although most want at least one director to own their own home and have a minimum personal income. First time buyers who have never owned any property have fewer options, but it is not impossible with the right lender.
Yes. Lenders send the mortgage funds to your solicitor, but the monthly payments must come from an account in the company's name and the rent should be paid into it too. Most high street banks and several online banks offer accounts for property SPVs.
Allow four to eight weeks from application to offer. Limited company cases involve more paperwork, including company documents and personal guarantees, and lender underwriting teams do not work weekends or bank holidays, so a little patience helps. We chase every case daily to keep it moving.
Yes, and a limited company is a very common way to hold them. Houses in multiple occupation need a lender that understands room by room rental income and licensing, so read our HMO mortgagespage for the details, then give us a call.
Most of our limited company clients choose a fixed rate, often over five years, because lenders stress test five year fixes at a lower rate, which can increase the maximum loan. A variable rate or tracker gives more flexibility if you plan to sell or refinance soon. We will show you both, subject to what the rental income supports.
Jamie is the founder of Alexander Southwell Mortgage Services and has over 20 years' experience in residential and buy to let lending. He advises landlords across the UK from the firm's office in Romsey, Hampshire, and is regularly quoted in the national press on mortgage and landlord issues. Alexander Southwell Mortgage Services is authorised and regulated by the Financial Conduct Authority, FCA number 1011890. Page last reviewed September 2026. Meet the teamor read our client reviews.
Your property may be repossessed if you do not keep up repayments on your mortgage. Some forms of buy to let mortgage are not regulated by the Financial Conduct Authority. Tax treatment depends on individual circumstances and may change in future.
