Can I get a buy to let mortgage with a limited company?
Yes, buy to let mortgages are available for limited companies registered in the United Kingdom.
Buy to let mortgages are generally only available to limited companies which are set up solely for the purchase of property and related business, such as management and disposal. These are known as SPV (Special purpose vehicles). Some of our lenders will accept those trading in other areas, but there are fewer lenders who will do this.
What is an SPV?
An SPV stands for Special Purpose Vehicle and is a limited company set up for a purpose.
If you invest in buy to let property through a limited company, the company is commonly set up through what is called a special purpose vehicle (SPV). Limited companies are registered with Companies House. There are hundreds of categories that describe what sort of business a company is involved in. They each have a “Standard Industrial Classification” (SIC) code. Codes relating to the purchase of property and related business, such as management and disposal property, are largely found in Section L on this Companies House website page.
The majority of buy to let lenders will require your limited company to be an SPV. However, we work with some lenders who will accept applications from trading companies.
What is the difference between a Limited Company, LTD Company and an SPV?
A Limited Company is a company owned by private investors. A LTD Company is the same, but some people use LTD as an abbreviated form of Limited. An SPV, as discussed above, is a type of LTD Company set up for a specific purpose.
What is the difference between purchasing property through a ltd company and as an individual?
Owning a buy to let property via a limited company results in different financial outcomes to owning a buy to let as an individual. You also have access to different buy to let mortgage products depending on which route you choose.
If landlords are planning to purchase and manage several properties, they might consider setting up an SPV to mortgage the properties, instead of having it in their own name. SPVs have their own legal status and are designed to separate the assets from anything else the landlord may own. Limited company or SPV buy to let is an attractive option for property investors wanting to maximise mortgage interest tax relief.
However, if the landlord is only planning to own and manage a single property, it may be in their best interest to purchase this individually. Please seek independent advice from a tax professional to determine the best opportunity for your circumstances.
Why purchase a buy to let property as a limited company?
Landlords who are looking to purchase a buy to let property may find that doing so via a limited company may be more cost-effective, due to tax relief.
Over time the government has made changes to the tax rules relating to buy to let, landlords purchasing through a limited company are subject to different tax relief, than if they purchased it in their own name. This means certain taxes will not be payable. Corporation tax, however will be payable on your profits, which is currently 19%.
Please note Commercial Trust is not able to offer tax advice as a service, please speak to a qualified tax professional before moving forward.
Where can I get a buy to let mortgage for a limited company?
As a specialist mortgage broker, Commercial Trust is able to offer buy to let mortgages for limited companies within the UK.
We’re experts in all types of limited company mortgages and we work with a large panel of over 80 specialist and high-street UK lenders. Our mortgage advisors will be able to help you find a great deal for your circumstances and have access to some of the best rates on offer.
We work with a range of over 80 UK buy to let mortgage lenders, including:
How to get a mortgage through a limited company?
You can either approach a lender yourself or utilise the specialist skills of a mortgage broker like Commercial Trust.
We help huge numbers of clients with their limited company buy to let investments. We understand the criteria you will need to meet and will be able to process your application with lenders who don’t accept applications without the use of an intermediary.
You may need to consult a tax advisor or accountant for help with setting up a limited company, or for professional advice on tax.
What is the criteria for a limited company mortgage?
The criteria for a limited company buy to let will vary, depending on which lender you choose. Some have stricter criteria than others.
Some example criteria include:
- Minimum deposit 15% of the value of the property (i.e. you can borrow up to 85% loan to value)
- An SPV or trading company must be in place for an application to be made (brand new companies are accepted from day one of incorporation)
- Some lenders may have a minimum income requirement, others do not
- To apply, you must be at least 18 years old. Some lenders have upper age restrictions, others do not
- Lenders will often consider the personal financial history of company directors
- Portfolio lending is available through a limited company
What are limited company buy to let mortgage rates?
Rates for limited company buy to lets are different to buy to let rates for individuals. This is because there are different risks associated with each type of borrowing.
To get an illustrative idea of limited company buy to let rates, use our buy to let calculator and select the “limited company/SPV” option before you search. This will show you the current rates we have available from our lenders. If you see a product that you are interested in, simply call the number above, live chat with a mortgage advisor during working hours or submit an application to receive a call back about the rate.