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Limited Company Buy to Let Mortgage
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The Complete Guide to Limited Company Buy to Let Mortgages UK
Content reviewed by Find Adviser mortgage experts with 10+ years experience in limited company BTL financing
In 2026, limited company buy to let mortgages have become an increasingly popular choice among UK property investors seeking tax efficiency and portfolio growth. With over 40% of UK landlords now using limited companies for their buy-to-let investments, understanding this mortgage structure is essential for both new and experienced property investors.
40%+
UK landlords use ltd companies for BTL
4-7%
Typical ltd company BTL rates in 2026
25%
Minimum deposit typically required
What Is a Limited Company Buy to Let Mortgage?
A limited company buy to let mortgage (also known as an SPV mortgage or ltd company BTL mortgage) is a specialist mortgage product designed for properties purchased through a limited company rather than in an individual's personal name. The limited company becomes the legal owner of the property and the borrower on the mortgage.
These mortgages are typically arranged through a Special Purpose Vehicle (SPV) – a company set up specifically for property investment, usually with SIC code 68100 (buying and selling of own real estate) or 68209 (other letting and operating of own or leased real estate).
Unlike personal buy-to-let mortgages where you're assessed primarily on personal income, limited company BTL mortgages focus on rental yield, the company's structure, and the directors' creditworthiness. Directors almost always provide personal guarantees, making them personally liable for the debt.
Benefits of Putting an Investment Property into a Limited Company
The shift towards buy to let mortgages for limited companies accelerated significantly after the introduction of Section 24 tax changes between 2017-2020. Here are the primary advantages:
1. Tax Benefits
Putting a buy to let property into a Ltd Company provides tax benefits which are not available when owning a property in your personal name.
2. Lower Tax Rates on Profits
Corporation Tax rates in 2026 range from 19% (for profits under £50,000) to 25% (for profits over £250,000), compared to income tax rates up to 45% for higher earners. This can result in substantial tax savings, particularly for landlords with multiple properties generating healthy profits.
3. Retained Earnings and Reinvestment
Profits retained within the company are taxed at corporation tax rates, not personal income tax. This allows landlords to accumulate capital for deposits on additional properties more efficiently than withdrawing profits personally and reinvesting.
4. Inheritance and Succession Planning
Shares in a property company can be transferred to family members more easily than individual properties, potentially reducing inheritance tax exposure and simplifying succession planning for larger portfolios.
- 100% mortgage interest relief as a business expense
- Corporation Tax (19-25%) vs. Income Tax (up to 45%)
- Flexibility in profit distribution and dividend planning
- Separation of personal and business finances
- Potential Capital Gains Tax advantages on disposal
Ltd Company BTL vs Personal BTL: Tax Comparison
Understanding the tax implications is crucial when choosing between personal and ltd company buy to let mortgages. Here's a simplified comparison for 2026:
| Factor | Personal BTL | Ltd Company BTL |
|---|---|---|
| Mortgage Interest Relief | 20% tax credit only | 100% deductible expense |
| Profit Tax Rate | 20-45% (Income Tax) | 19-25% (Corporation Tax) |
| Capital Gains | Up to 24% (from 2024) | Corporation Tax + dividend tax on extraction |
| Profit Extraction | Direct to personal | Via salary/dividends (additional tax) |
| Typical Mortgage Rates | 4-6% | 4.5-7% |
Note: Tax calculations are complex and depend on individual circumstances. Always consult a qualified tax adviser before making decisions based on tax implications.
How to Put a Buy to Let Property Within a Ltd Company
Lenders assess limited company buy to let mortgage UK applications based on several criteria:
Company Requirements
- UK-registered limited company (England, Wales, Scotland, or Northern Ireland)
- Appropriate SIC codes (68100, 68201, 68209 most common)
- SPV or trading company with property investment in Articles of Association
- Clean credit history (no CCJs, defaults against company or directors)
Director and Shareholder Requirements
- UK resident directors (some lenders accept non-UK residents)
- Clean personal credit history for all directors with 25%+ shareholding
- Minimum age 21-25 depending on lender
- Willingness to provide personal guarantees
- Some lenders require minimum personal income (e.g., £25,000+ pa)
Property Requirements
- Standard residential BTL, HMO, or multi-unit freehold
- Minimum property value typically £50,000-75,000
- Rental coverage ratio (typically 125-145% at stress rate)
- Standard construction preferred; non-standard may limit options
Important Considerations and Potential Drawbacks
While limited company BTL mortgages offer significant advantages for many landlords, they're not suitable for everyone. Consider these factors:
Higher Mortgage Costs
Limited company mortgage rates are typically 0.25-1% higher than personal BTL equivalents. Arrangement fees may also be higher. These costs need to be weighed against tax savings.
Extracting Profits
While profits are taxed at Corporation Tax rates within the company, extracting them as salary or dividends incurs additional personal tax. For landlords who need the rental income for living expenses, the tax advantage may be reduced.
Administrative Burden
Running a limited company involves annual accounts, Corporation Tax returns, confirmation statements, and potentially higher accountancy fees. For a single property, these costs may outweigh the benefits.
Personal Guarantees
Despite the "limited" liability structure, personal guarantees mean directors remain personally liable for mortgage debt. The liability protection only applies to other business debts.
Important Consideration
Limited company buy to let mortgages are generally more beneficial for higher-rate taxpayers, landlords planning to grow portfolios, and those who can retain profits within the company. Lower-rate taxpayers with single properties may find personal BTL more cost-effective. Professional advice is essential.
Limited Company BTL Market Trends 2026
The UK limited company buy to let mortgage market continues to evolve:
- Lender competition has increased product choice and improved rates
- More lenders now accept new SPVs without trading history
- Energy efficiency requirements (EPC C minimum) affecting property eligibility
- Increased scrutiny of rental stress tests amid rate volatility
- Growing acceptance of portfolio landlords with multiple ltd companies
According to UK Finance and industry data, limited company BTL lending now accounts for a significant portion of new buy-to-let business, reflecting the structural shift in how UK landlords hold investment properties.
Example Scenario: Personal vs Ltd Company BTL
This simplified example is for illustration only. Individual circumstances vary significantly.
Scenario: A higher-rate taxpayer (40%) purchases a BTL property for £250,000 with 75% LTV mortgage at 5.5% interest. Annual rent: £15,000. Annual mortgage interest: £10,312.
Personal BTL
- Rental profit: £15,000
- Income tax at 40%: £6,000
- 20% tax credit on interest: £2,062
- Net tax: £3,938
Ltd Company BTL
- Rental profit: £15,000
- Less mortgage interest: £10,312
- Taxable profit: £4,688
- Corporation Tax at 19%: £890
*Note: Ltd company example doesn't include costs of profit extraction, accountancy, or higher mortgage rates. Full analysis required for accurate comparison.
How Can a Limited Company Get a BTL Mortgage Rate in 2026?
To secure the best limited company buy to let mortgage rates:
- Establish your SPV or trading company with correct SIC codes
- Ensure directors have clean credit histories
- Prepare company documents (certificate of incorporation, memorandum and articles)
- Identify your target property and calculate rental yield
- Speak to a whole-of-market mortgage broker specialising in ltd company BTL
- Compare products across different lenders – criteria varies significantly
Working with a specialist broker is particularly valuable for limited company mortgages, as many lenders aren't available directly and criteria differences can significantly affect which products you qualify for.
Frequently Asked Questions About Limited Company BTL Mortgages
Common questions about buy to let mortgages for limited companies in the UK
A limited company buy to let mortgage is a mortgage specifically designed for properties purchased through a Special Purpose Vehicle (SPV) or trading limited company rather than in an individual's name. These mortgages allow landlords to hold buy-to-let properties within a corporate structure, potentially benefiting from different tax treatment on rental income and capital gains. The limited company becomes the borrower, and directors typically provide personal guarantees.
The main benefits include: 1) Corporation tax on profits (currently 19-25%) rather than income tax (up to 45%); 2) Full mortgage interest relief as a business expense, unaffected by Section 24 restrictions; 3) Potential inheritance tax planning advantages; 4) Separation of personal and business assets; 5) Ability to retain profits for reinvestment at lower tax rates. However, benefits vary based on individual circumstances and tax position.
To set up a limited company for BTL: 1) Register with Companies House (online, typically £12-50); 2) Choose an appropriate SIC code (68100 for renting/operating own real estate); 3) Consider an SPV structure specifically for property investment; 4) Open a business bank account; 5) Register for Corporation Tax with HMRC; 6) Consider professional advice for articles of association. Many landlords use accountants or company formation agents to ensure proper setup.
Limited company BTL mortgages typically require a minimum 25% deposit (75% LTV), though some lenders offer up to 80% LTV for experienced landlords or lower-risk properties. First-time landlords or new SPVs may face stricter requirements. The deposit must usually come from legitimate sources, and lenders will assess the company's and directors' financial positions during application.
Yes, limited company BTL mortgage rates are generally 0.25% to 1% higher than equivalent personal BTL rates in 2026. This premium reflects the additional complexity and risk lenders associate with corporate lending. However, when combined with tax efficiencies, many landlords find the overall cost comparable or even favourable, particularly higher-rate taxpayers with multiple properties.
Yes, but it's complex and costly. Transferring properties triggers Stamp Duty Land Tax (3% surcharge applies), potential Capital Gains Tax, and early repayment charges on existing mortgages. You'd also need to arrange new limited company mortgages. For many landlords, it's more practical to purchase new properties through the company while retaining existing ones personally. Always seek professional tax and legal advice before transferring.
As of 2026, limited company BTL mortgage rates typically range from 4.5% to 7% depending on LTV, property type, lender, and applicant profile. 5-year fixed rates around 5-6% are common for 75% LTV on standard residential BTL. Rates for HMOs, multi-units, or commercial conversions may be higher. Rates fluctuate with market conditions, so obtaining up-to-date quotes is essential.
Almost all limited company BTL mortgages require personal guarantees from directors (and often shareholders with 25%+ ownership). This means you're personally liable if the company defaults. Some lenders require guarantees covering the full loan amount, others a percentage. The guarantee effectively removes the limited liability protection for mortgage debt specifically.
Important Information & Disclaimer
This website provides general information only and does not constitute financial, tax, or legal advice. The content is intended for informational purposes to help you understand limited company buy to let mortgages and should not be relied upon for making financial decisions.
Any mortgage advice will be provided by qualified, FCA-authorised financial advisers through our partner network. Find Adviser (Limited Company Buy to Let Mortgage) is not regulated by the Financial Conduct Authority (FCA) and does not provide mortgage advice directly.
Tax treatment depends on individual circumstances and may be subject to change in the future. Information regarding tax is based on our understanding of current legislation and HMRC practice as of 2026. We strongly recommend consulting with a qualified accountant or tax adviser before making decisions based on potential tax benefits.
Regulatory Information
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Most buy to let mortgages are not regulated by the FCA. However, some lenders offer regulated BTL products for properties let to close family members.
When you enquire through this website, your details will be passed to FCA-authorised mortgage advisers who will contact you to discuss your requirements. There is no obligation to proceed, and initial consultations are typically free of charge.
Any adviser fees and lender arrangement fees will be clearly disclosed before you commit to any mortgage application.
Your data is handled in accordance with UK GDPR and the Data Protection Act 2018. By submitting your details, you consent to being contacted about mortgage services.