Why Purchase a Buy-to-Let Property as a Limited Company?

Taking out a mortgage and purchasing a buy-to-let property through a limited/LTD company or SPV (Special Purpose Vehicle) can be more tax-efficient than doing so in your personal name as a private landlord.

Here's why.

You Pay Income Tax on Rental Income from a Privately-Owned Rental Property

  • To calculate how much Income Tax you must pay, your rental income is added to your overall personal income which may push you into a new tax bracket and result in you paying Income Tax at a higher rate

You Pay Corporation Tax on the Rental Profits on Properties Held in a Limited Company, not Income Tax

  • Unlike Income Tax, there are no upper tiers for Corporation Tax - Corporation Tax is set at a static rate of 19% (2021 – 2022), which means that’s the maximum rate you’ll be charged unless the Government change the rate of Corporation Tax itself
  • You can offset many expenses against the income for a company that you can’t with a privately-owned rental property

You can find more information on the other advantages of purchasing a buy-to-let through a limited company in our guide.

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Limited Company Buy-to-Let Mortgage Rates

Use our free best buy tool to compare the best buy-to-let mortgages for limited companies.

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We've found 601 mortgage deals that match your search

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Scheme ID 3088
Initial rate ? 2.74% then 4.74% (variable)
Monthly repayments ? £ 685
Type/Duration ? Variable
Scheme fees ? £4,100
Cost comparison ? £20,540

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £0

Flexibility

Max LTV 60%
Overpayments allowed? Yes
Early Repayment charges 3% in year 1, 2% in year 2

Other info

Exit fees £35
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a fixed rate for 2 years at 2.74%, and then on a variable rate for 23 years at 4.74%. This would require 24 payments of £1,382.40 and 276 payments of £1,684.62. The total amount payable would be £647,635 made up of the interest (£643,535) and fees (£4,135 which includes exit fees of £35). The overall cost for comparison is 4.67% APRC representative.

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Scheme ID 39629
Initial rate ? 2.74% then 4.74% (variable)
Monthly repayments ? £ 685
Type/Duration ? Variable
Scheme fees ? £4,399
Cost comparison ? £20,839

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £0

Flexibility

Max LTV 60%
Overpayments allowed? Yes
Early Repayment charges 3% in year 1, 2% in year 2

Other info

Exit fees £35
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a fixed rate for 2 years at 2.74%, and then on a variable rate for 23 years at 4.74%. This would require 24 payments of £1,382.40 and 276 payments of £1,684.62. The total amount payable would be £647,934 made up of the interest (£643,535) and fees (£4,434 which includes exit fees of £35). The overall cost for comparison is 4.68% APRC representative.

0344 346 3672

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Scheme ID 204870
Initial rate ? 2.75% then 4.2% (variable)
Monthly repayments ? £ 688
Type/Duration ? Variable
Scheme fees ? £3,324
Cost comparison ? £19,074

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £750

Flexibility

Max LTV 75%
Overpayments allowed? Yes
Early Repayment charges £240, plus (3% in years 1-2)

Other info

Exit fees £240
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a fixed rate for 2 years at 2.75%, and then on a variable rate for 23 years at 4.2%. This would require 24 payments of £1,386.13 and 276 payments of £1,603.11. The total amount payable would be £609,114 made up of the interest (£605,790) and fees (£3,564 which includes exit fees of £240). The overall cost for comparison is 4.17% APRC representative.

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Scheme ID 9563
Initial rate ? 2.75% then 4.2% (variable)
Monthly repayments ? £ 688
Type/Duration ? Variable
Scheme fees ? £3,324
Cost comparison ? £19,074

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £750

Flexibility

Max LTV 75%
Overpayments allowed? Yes
Early Repayment charges £240, plus (3% in years 1-2)

Other info

Exit fees £240
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a fixed rate for 2 years at 2.75%, and then on a variable rate for 23 years at 4.2%. This would require 24 payments of £1,386.13 and 276 payments of £1,603.11. The total amount payable would be £609,114 made up of the interest (£605,790) and fees (£3,564 which includes exit fees of £240). The overall cost for comparison is 4.17% APRC representative.

0344 346 3672

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Scheme ID 3284
Initial rate ? 2.79% then 5.5% (variable)
Monthly repayments ? £ 698
Type/Duration ? Variable
Scheme fees ? £5,354
Cost comparison ? £22,094

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £0

Flexibility

Max LTV 75%
Overpayments allowed? Yes
Early Repayment charges £114, plus (4% in year 1, 3% in year 2)

Other info

Exit fees £114
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a fixed rate for 2 years at 2.79%, and then on a tracker rate for 23 years at 5.5%. This would require 24 payments of £1,390.08 and 276 payments of £1,808.71. The total amount payable would be £701,708 made up of the interest (£696,354) and fees (£5,468 which includes exit fees of £114). The overall cost for comparison is 5.39% APRC representative.

0344 346 3672

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Scheme ID 5589
Initial rate ? 2.79% then 5.5% (variable)
Monthly repayments ? £ 698
Type/Duration ? Variable
Scheme fees ? £5,155
Cost comparison ? £21,895

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £0

Flexibility

Max LTV 75%
Overpayments allowed? Yes
Early Repayment charges £114, plus (4% in year 1, 3% in year 2)

Other info

Exit fees £114
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a fixed rate for 2 years at 2.79%, and then on a tracker rate for 23 years at 5.5%. This would require 24 payments of £1,390.08 and 276 payments of £1,808.71. The total amount payable would be £701,509 made up of the interest (£696,354) and fees (£5,269 which includes exit fees of £114). The overall cost for comparison is 5.38% APRC representative.

0344 346 3672

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Scheme ID 25289
Initial rate ? 2.85% then 5.1% (variable)
Monthly repayments ? £ 713
Type/Duration ? Variable
Scheme fees ? £5,100
Cost comparison ? £22,200

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £0

Flexibility

Max LTV 65%
Overpayments allowed? Yes
Early Repayment charges £135, plus (2% in years 1-2)

Other info

Exit fees £135
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a fixed rate for 2 years at 2.85%, and then on a tracker rate for 23 years at 5.1%. This would require 24 payments of £1,399.34 and 276 payments of £1,744.00. The total amount payable would be £674,235 made up of the interest (£669,135) and fees (£5,235 which includes exit fees of £135). The overall cost for comparison is 5.03% APRC representative.

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Scheme ID 201717
Initial rate ? 2.85% then 5.1% (variable)
Monthly repayments ? £ 713
Type/Duration ? Variable
Scheme fees ? £5,250
Cost comparison ? £22,350

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £0

Flexibility

Max LTV 65%
Overpayments allowed? Yes
Early Repayment charges £135, plus (2% in years 1-2)

Other info

Exit fees £135
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a fixed rate for 2 years at 2.85%, and then on a tracker rate for 23 years at 5.1%. This would require 24 payments of £1,399.34 and 276 payments of £1,744.00. The total amount payable would be £674,385 made up of the interest (£669,135) and fees (£5,385 which includes exit fees of £135). The overall cost for comparison is 5.04% APRC representative.

0344 346 3672

or

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Scheme ID 9573
Initial rate ? 2.85% then 4.2% (variable)
Monthly repayments ? £ 713
Type/Duration ? Variable
Scheme fees ? £3,324
Cost comparison ? £19,674

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £750

Flexibility

Max LTV 75%
Overpayments allowed? Yes
Early Repayment charges £240, plus (3% in years 1-2)

Other info

Exit fees £240
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a fixed rate for 2 years at 2.85%, and then on a variable rate for 23 years at 4.2%. This would require 24 payments of £1,401.61 and 276 payments of £1,604.35. The total amount payable would be £609,714 made up of the interest (£606,390) and fees (£3,564 which includes exit fees of £240). The overall cost for comparison is 4.19% APRC representative.

0344 346 3672

or

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Scheme ID 34062
Initial rate ? 2.85% then 5.1% (variable)
Monthly repayments ? £ 713
Type/Duration ? Variable
Scheme fees ? £5,449
Cost comparison ? £22,549

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £0

Flexibility

Max LTV 65%
Overpayments allowed? Yes
Early Repayment charges £135, plus (2% in years 1-2)

Other info

Exit fees £135
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a fixed rate for 2 years at 2.85%, and then on a tracker rate for 23 years at 5.1%. This would require 24 payments of £1,399.34 and 276 payments of £1,744.00. The total amount payable would be £674,584 made up of the interest (£669,135) and fees (£5,584 which includes exit fees of £135). The overall cost for comparison is 5.04% APRC representative.

0344 346 3672

or

Enquire now

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How to Get a Mortgage Through a Limited Company

Speak to a Mortgage Broker

You’ll need a specialist mortgage broker like John Charcol to apply for a buy-to-let mortgage through a limited company. Not only do we understand what criteria you need to meet for your mortgage, but most limited company buy-to-let mortgage lenders won’t accept your application unless you use an intermediary.


Consult a Tax Adviser or Accountant

For help setting up a limited company for buy-to-let purchases, consult a tax adviser/accountant. They’ll be able to make sure everything is set up properly. You may want to approach a tax adviser/accountant before speaking to a mortgage adviser. That way, your limited company can be set up and you’ll be ready to start the mortgage application process when you first speak to your mortgage adviser. Nonetheless, if you want some more information before setting up your limited company, then give us call on 03304 332 927 and we’ll answer your questions.

How Can John Charcol Help with Limited Company Mortgages?

We Take Care of Everything

With over 45 years of service, we've seen it all. We can save you money, time and make buying your property easy.

We're Highly Recommended

We have over 1,500 5* reviews on reviews.co.uk, so you can feel confident that your mortgage is in the right hands.

We Give Personal, Expert Advice

We work around your schedule to help you arrange a mortgage that suits your circumstances, no matter how complex.

Our Purchase/Refinancing Process

1. Meeting with Adviser and Mortgage Research

When you phone us, you can either arrange a phone appointment with your adviser or a face-to-face meeting – whatever suits you. Your adviser will ask you some questions and, once they have all the information they need, they’ll go away and find you the buy-to-let mortgage for your circumstances and future needs. They’ll also arrange a follow up call to present you with what they’ve found. It may require more than one conversation to gather all the right information, depending on where you are in your property search.

2. Decision in Principle

Once you’re happy with their recommendation, you adviser will go about securing your DIP (Decision in Principle) - which is basically a promise from the lender that they’ll loan you money on the condition that the information you’ve provided is correct and subject to a valuation of the property.

3. Offer on Property/Refinancing

After you’ve secured a DIP (Decision in Principle), you’ll be in a great position to make an offer on a property or move forward with refinancing and possibly changing ownership from private landlord to limited company.

4. Pre-Application and Submission

Following the acceptance of your offer, we’ll send you some information which explains all the documents we need to submit to the lender. You’ll be assigned a client relationship manager who’ll check and submit certified copies of your documents; they’ll liaise with both you and the lender. Your adviser will then submit the fully packaged mortgage application.

5. Lender Underwriting and Valuation

The lender will underwrite your application; this basically means they’ll verify the information you’ve provided and review all your documents for themselves. They’ll also instruct a valuation for their purposes on the property.

6. Mortgage Offer

If the lender is happy with everything they’ve found, they’ll send you a mortgage offer. They’ll also send us a copy.

7. Conveyancing

After you’ve accepted your mortgage offer, you’ll go through the legal part of the process, known as conveyancing. This is where the solicitors/conveyancers draw up contracts and organise the actual, legal purchase of the property/refinancing. If buying, you’ll also need to arrange buildings insurance at this stage, making sure it’s in place from exchange.

8. Exchange and Completion

Once everything is in place, your conveyancer/solicitor will exchange contracts with the seller’s conveyancer/solicitor. It’s at this point that you put down your deposit and are legally bound to buy the property. You’ll lose your deposit if you pull out after exchange. The purchase completes when money is transferred on an agreed-upon date. As soon as you have a date for completion you’ll know when the property can take tenants, therefore you can start speaking to a letting agent. If you’re refinancing, then your conveyancer/solicitor will set a date to draw down the funds and pay off any existing lender(s) once the mortgage offer’s released.

LTD Company Mortgage FAQs

What’s the Difference Between a Limited Company, LTD and SPV Mortgage?

  • A limited company is a company that’s owned by private investors; it’s not on the stock exchange. These investors are legally responsible for the company’s debts, but only to extent of the amount they’ve invested
  • An LTD company is the same as a limited company, therefore an LTD company buy-to-let mortgage is the same as a limited company buy-to-let mortgage. Some people simply prefer to use “LTD” instead of “limited”. It’s entirely an aesthetic choice
  • An SPV (Special Purpose Vehicle) is a limited company which is set up specifically to manage properties. You set one up precisely for the purpose of taking out a limited/LTD company buy-to-let mortgage

How Do I Set Up a Limited Company/Get an SPV for a Buy-to-Let Mortgage?

To take out a buy-to-let mortgage through a limited company, your limited company needs to have been set up with the purpose of buying/selling/managing property.

If you don’t already have a suitable limited company, you can set up an SPV. An SPV is a company you set up to buy/sell/manage property, specifically so that you can get a buy-to-let limited company mortgage.

It’s important you speak to an accountant as they can help make sure that your SPV is set up with certain SIC codes and definitions in mind.

See our guide for how to set up a limited company for buy-to-let purchases and for information about SIC codes.

Can a Limited Company Get a Buy-to-Let Mortgage?

You can take out a buy-to-let mortgage through a limited company. The buy-to-let property you purchase with the mortgage will be owned by the limited company. Many people choose to do this - rather than take out a buy-to-let mortgage and purchase a property as a private landlord - because it can be much more tax-efficient and better for Inheritance Tax purposes.

What Are the Criteria for a Limited Company Mortgage?

The criteria for limited company buy-to-let mortgages are fairly similar to the criteria for normal buy-to-let mortgages.

 There are a couple of things to bear in mind though:

  • The limited company has to be set up/have been set up with the purpose of buying/selling/managing property
  • The assessment criteria for limited company mortgages can vary from lender to lender
  • The lender will often consider the personal financial history of the company director(s) and will usually require that the director(s) personally guarantees the debt
  • There’s usually no minimum time that the company has to be incorporated for

How Many Mortgages Can I Have Through a Limited Company?

You can have as many mortgages as your lender will allow. Some lenders will let you have up to 4 or 5 mortgages with them. They’ll also often have a limit on the total amount you can borrow with them and a total borrowing limit across all lenders.

If the overall figure you want to borrow becomes too high then you’re essentially running a commercial operation and should therefore take out a commercial mortgage(s).

Do I Need a Commercial Mortgage?

You’ll need a commercial mortgage if the overall figure you want to borrow across lenders is too high for a limited company buy-to-let mortgage.

Home Insurance

We can arrange buildings and contents insurance for properties owned by limited companies through our partnership with Legal and General.

Learn More

Protection

Our in-house protection team can find you protection cover for buy-to-let limited company directors tailored to suit your specific requirements.

Learn More

JC Legal

We can refer you to an experienced solicitor from our carefully selected panel - one with the skills to help you with your buy-to-let company mortgage.

Learn More

Equity Release

Want to release equity from a property? We can help you access the money in your property through our partnership with Key Retirement.

Learn More

What our customers say

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    Absolutely brilliant. It has been a very long road to finally owning my own home but Randeep has been there all along and just at the end of the phone. The mortgage process was very slick and they found me solicitors and a company who sorted out all my utilities too. Couldn’t recommend them more!

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    Chris L at John Charcol recently helped us as first-time Homebuyers. Not only did Chris find us a brilliant deal that enabled us to find our dream home, he was also very friendly, knowledgeable & helpful throughout the entire process - perfect if like us you've not done this before! 10/10 would recommend Chris.

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  • 5

    Scott Barron provided an amazing service for a few key reasons. Firstly, as a Kenyan resident (ex UK), he found a product for me. This wasn't easy to find and certainly took time to get approved. Scott was constantly in touch, updating me all the time and pushing the lender for confirmation regularly. Felt like he was really taking care of my interests. I'm very grateful to Scott and the team at Charcol.

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    I have just done my second mortgage application with Scott Barron and as usual his service was first class. He has helped me outside of his normal working hours and his determination to get the best for me was faultless again. I will always use Scott for my mortgage needs. Toni was also excellent and communicated throughout professionally and made the process simple for me. Can’t recommend highly enough.

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    I would highly recommend John Charcol. Emily and Andy Cairns were brilliant! Emily was always available to explain and assist with what was not an easy situation and I am happy to have exchanged and completed on my new house. Many thanks to both of them

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    Scott Barron and Chantelle Parker were extremely helpful and communicative throughout the process. They helped me find solutions to my slightly complex mortgage situation. I would refer family and friends to Scott and Chantelle.

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    Excellent service and support. This was a somewhat complicated re-mortgage, but we were supported at all times and the process was very smooth and successful.

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    Ryan Guy at John Charcol helped me out recently and was absolutely fantastic. He diligently contacted about 40 mortgage providers and gave me good, clear, helpful advice. He regularly called and emailed me with updates. Top bloke and top service

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  • 5

    We had the pleasure of using John Charcol for the purchase of our first home. They made everything so simple for us. From sourcing our mortgage to finally getting us over the line on completion Day. Norbert and Samantha worked tirelessly. They chased our solicitors at every opportunity and kept us up to date on a daily basis. If one of them wasn’t in, they handed over to a colleague to make sure there was continuity at all times for us. I would definitely recommend John Charcol and I would certainly not go anywhere else myself.

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