Limited Company Buy to Let Mortgage
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Limited Company Buy to Let Mortgage
Can I get a Buy to Let a mortgage via a limited company? Is this difficult to do?
Yes, you can, and it’s not too difficult. Anyone can set up a new limited company to purchase a Buy to Let. There are other criteria that we’ll explore as we go through these questions.
It can be via a new company, as well. It’s not like getting a mortgage for a company director where you need two years’ history. Some people set up a limited company for each property, but you don’t need to do that if it’s just you. But if you’re buying with someone else and you’ve got properties with different people, you might have a limited company for each one.
It’s easy to set up a limited company yourself online, or if you’ve got an accountant, they can do it for you. You set up a new limited company and we then do a mortgage application. The lender is still looking at you, even though it’s owned by the limited company. You’re the important bit, rather than the legal name that owns the property.
How do limited company Buy to Let mortgages work? What are the eligibility criteria?
I could probably go on for an hour about the intricacies of it all, but we’ll keep it brief. A limited company mortgage works the same as any other Buy to Let. You put in a deposit and take a mortgage for the rest.
You set up a company bank account to pay the mortgage and receive the rent. Buying the property it’s the usual process with a solicitor and mortgage lender – the same people are involved.
Eligibility criteria are the same as those of any Buy to Let mortgage, and you can look at our other pages on Buy to Let mortgages in general. But if you can get a Buy to Let, you can do it through a limited company.
We typically see limited company mortgages done by people who want to own several properties, or they’re a higher rate taxpayer. As a higher rate taxpayer, owning a Buy to Let property in your personal name is pointless.
By the time you’ve paid your mortgage interest and then the tax bill, you’re left with very little, if anything at all. Doing it through a limited company changes that. If you’re thinking about this, get in touch and we can go through all the details.
How much deposit do I need for a Buy to Let through a limited company?
Generally speaking, it’s the same whether it’s through a limited company or not. We tend to suggest a 25% deposit.
A couple of lenders advertise 20% as an option, potentially, but the rate may be quite high. Also, the rental calculation to see if it’s affordable doesn’t always work at 20% deposit. So 25% is what we should be aiming for.
Is it worth setting up a limited company for a Buy to Let?
It depends on your individual circumstances, who you are, what you do and your tax bracket.
Let’s say a couple is buying a property together and one person is the breadwinner. They’re a higher rate taxpayer, but the other person isn’t. That person doesn’t earn very much as they look after the children. The couple wants to buy one or two properties.
We can usually get away with doing that personally. The couple would have joint ownership of the property, but have it set up as tenants in common, so they own different shares.
The person with a small income can own 99% of the property, and the other owns 1%. Then 99% of the rent and 99% of the tax liability is on the person who is a basic rate taxpayer. That could make it more efficient not to use a limited company. You only pay 20% tax on the profit over and above the mortgage interest – as you get 20% tax relief on the mortgage interest [all figures correct at the time of recording in August 2025].
Where you need to consider setting up a limited company is if you’re both higher rate taxpayers or the rent from your property is going to push you into higher rate tax.
There are pros and cons, and it depends whether you need the monthly income or if that’s just a nice little extra and you can let it grow. If you can leave the money in the company account and never take it out, you’ll never pay any personal tax on it. It’s there for the future. You might choose to start taking it out when you retire.
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What are the benefits and drawbacks of owning property through a Buy to Let limited company?
There are some drawbacks. The rate you’ll pay on your mortgage will be higher – it’s currently a good percent or so more through a limited company than personally.
If you’re doing this because you need the monthly rental income, you’re probably not going to see much difference doing it in a limited company versus not. If you don’t have a limited company, you’ll pay more tax, but your mortgage rate will be lower. The limited company approach really works if you don’t need the rental income and you can leave it in the company.
In terms of benefits, it’s more tax efficient if you can leave the money in the business. Also, the lender’s calculations are a little bit more generous. You’ll get a bit more borrowing through a limited company than personally.
The main thing is the rental income calculation – how much rent you’ll get versus a mortgage payment. The stress test the lender uses for a higher rate taxpayer is not very generous, but better for a limited company.
I can’t remember the last time I saw one that didn’t work with a 25% deposit through a limited company. Sometimes with a personal mortgage for a higher rate taxpayer, the stress test doesn’t quite fit with a 25% deposit. That’s a factor. There are definitely pros and cons.
Do limited companies pay stamp duty on Buy to Let? What other costs are involved here?
Limited companies do pay stamp duty at the same rate that you would personally – there’s no difference there.
There are some other costs. You’re going to need to set up the company and you can do that online for £100 or so. You’re going to need an accountant to help you with the accounts for your limited company. If you just do it personally you can fill in your own tax return, but a limited company requires an accountant to do the books.
The rate’s going to be a little higher, but there are no other set costs necessarily beyond buying a property in the normal way.
How do I get a Buy to Let mortgage through my limited company? What’s the process?
Before you do a mortgage application, we need the company to be set up. You just do that online or get your accountant to do it. A company number will be registered on Companies House – that needs to be in place.
Then we do your mortgage application. Not all lenders offer this, so we can’t go to Santander or Nationwide for it. We’re only going to go to specific lenders that are set up to handle limited company applications – and not all Buy to Let lenders do limited companies.
The application, though, is just the same as any other. Limited company Buy to Let is more in-depth and there are lender restrictions, so don’t try and do it yourself – just use a mortgage broker.
The chances are, if you’re able to buy a Buy to Let through a limited company, you’re probably a busy person. You’re better off just letting a broker do it, really.
How does remortgaging a Buy to Let property work through a limited company?
There’s no difference for a limited company. We need to make sure we go to the right lenders, but otherwise it’s exactly the same. It might even be the same lender and we just swap rates over.
We’ll compare the options and choose the lender that offers the most benefit to you. A new application goes to them as at any other time. You’re just going to pay a limited company rate, not a personal rate.
Here’s an interesting thing, though. If you already own a property personally and want to move it into your limited company, your company will usually have to buy the property from yourself.
It’s different if you own a property in one company and want to transfer it to another in the same group. Some developers build property and move that into their rental company. If it’s in the same group of companies, they can do that.
But if you own a property personally and you’re moving it to a limited company, realistically, you’re going to pay stamp duty – it’s a purchase and not a remortgage. Just an extra point to note.
How can a mortgage broker help? Anything else to add?
It’s a minefield choosing who to go to and how to get it all done. Whether you should or not is a conversation to have with your mortgage broker and probably your accountant – it’s different for everyone.
If you’re thinking about this, you need to speak to a mortgage broker. I’d like it to be us, but any mortgage broker will do.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.
For specialist tax advice, please refer to an accountant or tax specialist.
The information contained within this article was correct at the time of publication but is subject to change.
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