Limited Company Buy to Let Mortgage

Can I get a Buy to Let mortgage via a limited company? Is it difficult to do this?

Yes, you absolutely can get a Buy to Let mortgage through a limited company. It’s quite common these days. Most people actually buy through limited companies referred to as SPVs – Special Purpose Vehicles.

That just means it’s a company set up specifically to hold property. It’s not necessarily more difficult in terms of the process, but it changes the lender choice. We’ll use different banks because some like limited companies, white others don’t.

High Street lenders don’t tend to offer this, for example. But that doesn’t really change things from the client’s perspective. It just changes what we do on our side.

How do limited company Buy to Let mortgages work? What are the eligibility criteria here?

Eligibility is very similar to buying in a personal name. One difference is proof of income, which isn’t necessarily required for a limited company. A limited company is thought of as its own legal entity, and won’t have income requirements, whereas in your personal name a lot of lenders may require a £25,000 basic income from something else other than property.

You generally need clean credit, and a business plan for your Buy to Let property. Those are things you would need both via a limited company and personal. Rental income calculations and rental stress testing can sometimes be better in a limited company. If you’re a higher rate or additional rate taxpayer, calculations for you in a personal name are quite tough.

Because a limited company only pays corporation tax, which is between 20% and 25% depending on turnover, the rental calculations can be a lot more favourable. Ultimately, that means you can borrow more in a limited company.

How much deposit do I need for a Buy to Let through a limited company?

The standard is 25%, although a few lenders will go to 80%. They’re relatively expensive on rate and on arrangement fees, but it can be done if you’re really struggling with your deposit amount.

As always, the more deposit you put in, the cheaper the rate’s likely to be. We tend to see break points at Loan to Value rations of 75%, 65% and 50%. If you can increase your deposit from 25% to 35%, your rate’s likely to come down. If you can reach a 50% deposit, your rate will drop significantly.

Is it worth setting up a limited company for Buy to Let?

In almost all instances, yes. That said, you need to speak to an accountant about your own personal circumstances, because there are lots of caveats to that.

If you’re in a position to be buying property, a limited company is likely to be the right option for tax reasons. A limited company has benefits that personal ownership doesn’t, as well.

In a limited company, you can offset mortgage interest against your profits. In a personal name, you can’t.
On a personal Buy to Let, if you make £10,000 a year in rental income, HMRC will tax you on that at your marginal rate. That might be 25% or 45% on the £10,000, even though you need to make mortgage payments out of that. Even at 25% you’re left with £7,500 before you pay the mortgage, so your profit’s quite small.

In a limited company, it works in reverse. Based on that £10,000, you pay your mortgage payments first. Let’s say that’s £4,000, leaving you £6,000 profit. Then you pay 25% on the £6,000, which is £1,500.
In that very crude example, there’s a £1,000 difference in tax.

Do limited companies pay stamp duty on Buy to Let? What other costs are involved?

Yes, they do pay stamp duty – including a 3% additional property surcharge. If you were to buy in your personal name and you didn’t own any property at all, you might qualify for the First Time Buyer’s allowance.

In a limited company, you can’t use that. Even if you don’t already own a property in your personal name, the company is seen as its own legal entity and doesn’t qualify for a personal allowance. It will pay the full additional property surcharge on any purchase.

Other costs include incorporation fees – where setting up a limited company costs around £15. You will need to file accounts every year with HMRC, so you’re going to want an accountant which will cost you a few hundred pounds at least.

Mortgage rates tend to be pretty much the same, now, for personal and limited company purchases. The difference is that some lenders have a percentage arrangement fee and personal lenders tend to have fixed fees.

That’s changed a little in the last couple of years as interest rates rose because of inflation. Lenders have been very creative with their products – but as a general rule, you might find slightly higher fees for a limited company [information correct at the time of recording in July 2025].