Limited Company Buy To Let Mortgages

For buying, remortgaging or transferring investment properties in a Limited Company

Expert advice

Talk to one of our Property Finance Specialists

Loan Amount

£100k-£5m

Loan Term

Up to 25 years

Time to Funds

As Little as 45 days

Interest Rate

From 5%

Buy to let mortgages for Limited Companies

Investing in residential property can be one of the best ways to maximise your returns and build long-term value. Increasingly, property professionals are purchasing new acquisitions in a Limited Company, or transferring properties to a Limited Company, for tax purposes as well as succession planning.

What is a Limited Company buy to let mortgage?

A Limited Company buy to let mortgage is a mortgage for property investors who are purchasing a residential property to let out. Properties can be houses, flats, HMOs or student accommodation. The mortgage can be used to purchase the property, to refinance an existing mortgage, to release equity from the property, or to aid the transfer of the property from sole names into the Limited Company. Limited company buy to let mortgages aren’t currently regulated by the Financial Conduct Authority (FCA).

How does a Limited Company buy to let mortgage work?

As with personal buy to let mortgages, mortgages in company names tend to be quite long term, often repayable between three and 30 years. A popular choice is to go for an interest only mortgage in order to minimise the monthly repayment, but capital and interest is always available.

Lenders will need to verify that you can afford to meet the monthly mortgage repayments, as well as meeting other specific criteria. This will always involve comparing the monthly mortgage payment against the monthly rental income.

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Are Limited Company buy to let mortgages more expensive?

Now that Limited Company buy to let mortgages are becoming more and more popular many lenders are offering the same market-leading rates and terms to Limited Companies as they do for individuals. It once was true that it was more expensive to borrow via a Limited Company, but times have moved on meaning you can access the same products regardless of which entity you borrow in. In many cases it can be possible to borrow more via a Limited Company versus borrowing in your sole name as a higher rater taxpayer. This is because lenders typically require rental income to be 140% of the loan repayments for individual borrowers who pay higher rate tax. However, for Limited Companies the requirement is lower at 125%, meaning more could be borrowed.

How much does a Limited Company buy to let mortgage cost?

A Limited Company buy to let mortgage will usually come with an arrangement fee and an annual interest rate. You will also need to pay for a valuation fee and solicitor fees.

Typical lender costs may include:

Application fee: often added to the loan. Typically around 1.5%, but sometimes this can be as low as 1% or as high as 2%.

Interest rate: normally shown as an annual interest rate. Depending on the lender’s assessment of your risk rating, this often ranges from 2.5% to 6% per annum. You can normally opt for fixed rates for 2 years of 5 years, or variable rates (these are often a little cheaper, but could rise during the loan term).

Other fees: such as early repayment charges, and third party fees such as valuation fees. Always read the loan contract in detail.

Limited Company Buy to let mortgage interest rates

Which lender has the best Limited Company buy to let mortgage rates? It’s a simple question but the answer depends on your specific situation. Buy to let mortgage interest rates vary from lender to lender based on their view of your risk profile. Lenders have their own risk appetites and scorecards, but a helpful way to get an idea of what interest rate you could get is to think in terms of “risk bands”:

Risk band A: Rates between 2.5% - 3.5% per annum. Strong personal credit score, strong company credit score, straight-forward property types, good quality private tenants on Assured Shorthold Tenancies (ASTs)
Risk band B: Rates between 3% - 4.5% per annum. Reasonable personal score with only minor issues, reasonable company credit score, perhaps more complex property types including HMOs and multi-unit freehold blocks, tenants on Assured Shorthold Tenancies (ASTs).
Risk band C: Rates between 4% - 6% per annum. Some recent credit issues or weak credit score (missed payments or satisfied CCJs), complex property types that are difficult to lend against, complex tenants such as vulnerable tenants, more complex lease types such as corporate letting agreements.

Calculate how much you could borrow

Use our simple Buy To Let Mortgage Calculator to work out how much you may be able to borrow

Do I qualify for a Limited Company buy to let mortgage?

Each lender has their own set of criteria that you must meet in order to be considered for a buy to let loan. The list of eligibility checks that lenders use to decide whether or not to lend include assessments of your experience, income and credit history. They’ll also assess the type of property you’re buying, the quality of tenant and how much rent you’ll get.

Typically you’ll be eligible for a buy to let mortgage if:

How quickly can I get a Limited Company buy to let mortgage?

Arranging a buy to let mortgage will take a similar amount of time to arranging your personal mortgage. The process involves gaining approval, instructing valuers, and then the conveyancing process with solicitors.

If you, your lender and your solicitor pull out all the stops and arrange everything as quickly and efficiently as you possibly can, you’ll likely be looking at a time frame of 6 to 8 weeks. Of course, more complex mortgages can often take far longer than this. If you need to move quicker than this you should consider a bridging loan.

Make sure everything runs smoothly by ensuring clear, fast communication with your lender, and keep all your paperwork to hand to help the process along. Using an experienced broker can really help to keep everyone moving and deal with any hiccups along the way.

Transferring properties from personal names to Limited Company

You should always get tax advice from a qualified accountant when considering the best way to structure your property investments. If you’ve received advice to transfer property from personal names or an LLP in to a Limited Company then many lenders will be able to lend for this purpose, so long as the sale is at market value.

In some specialist cases, based on specialist accountant advice, it is possible to transfer property into a Limited Company and novate the mortgage from the old entity to the new company in order to minimise tax and potentially stamp duty. This is a very specialist process meaning that the mortgage is effectively transferred like-for-like, enabling the transaction to meet the specific criterion.

Need advice for a Limited Company buy to let mortgage?

Talk to one of our Property Finance Specialists. We’re on hand to take you through the options available.