Buy To Let Mortgages For Limited Company

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

It depends on your circumstances and what you want to achieve in the long and short-term. I’m not a tax advisor, and all clients should seek professional tax advice when thinking about buying property through a limited company.

A potential advantage of buying in a limited company is that the mortgage interest can be fully deducted from your costs in a limited company, whereas in personal names the rules are different. It can be more tax efficient for higher rate taxpayers, but again, speak to a tax professional to get that verified.

Another key thing is that lenders often allow higher borrowing amounts, due to different stress testing for limited companies compared to personal ownership.

If you’re a higher rate taxpayer, for the same property, purchasing in your personal name, a lender might offer you a smaller mortgage than through a limited company. There are advantages, but there are also disadvantages.

It is more expensive buying in a limited company. You’ll see higher interest rates and fees, because it is more complex and there’s a higher level of risk to the lenders. You also need to think about ongoing administration such as your company accounts and Companies House filings. We recommend paying for an accountant to look after all that for you.

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

Yes, you’re going to have to pay stamp duty on your Buy to Let, whether you buy in personal names or a limited company. A surcharge applies as well, which is an additional 5% as we speak today in September 2025. That might change in the future.

Other costs are standard with all mortgages – such as lender arrangement fees, valuation fees and legal costs. Also, think about your ongoing costs. Are you going to hire an accountant to look after your accounts? Are you going to hire a management company to look after the property and your tenants?

All those costs can go through the company, but you need to think about whether it makes it all worthwhile.

What are the benefits of owning property through a Buy to Let limited company?

The main reason why people buy through limited companies is for tax reasons. Speak to a tax professional to get advice for your own circumstances, but usually you’ll get full mortgage interest relief.

Corporation tax rates are lower than higher rate personal tax, and you can take income from the limited company as dividends, which is again taxed at a different rate, so you may benefit from that.

As we said before, you can often borrow more because of how stress testing is done for limited companies compared to personal ownership.

A limited company potentially also gives you easier succession planning or inheritance planning, as you could allocate shares in your company to your family. Instead of selling the property, you could transfer the company to them. We’re also seeing some landlords now selling the company that owns their properties.

What are the drawbacks and disadvantages?

We talked about the costs of ongoing admin, and the fact that you need to give personal guarantees for a mortgage in a limited company.

Another thing to consider is that the interest rates are usually higher for a mortgage in a limited company than a personal mortgage. The lender fees can be higher as well, compared to personal Buy to Let.

How do I get a Buy to Let mortgage through my limited company?

First you need to set up your limited company with the correct industry codes applied, appoint the directors and shareholders of the company, and get it registered at Companies House. That’s fairly straightforward, but you can also use companies that specialise in this.

Next, open a company bank account, because the lender’s going to want to see your company operating properly with an account registered in its name. All your costs and income will need to go through that account.

Get your paperwork together – your income details, your bank statements and all the company setup documents. Then, speak to a broker – we make the application process a lot smoother and get you the right deal for your circumstances.

How does remortgaging a Buy to Let property work through a limited company?

It’s the same as a standard remortgage. It always depends on the rental income you’re getting and the valuation of the property. If those change, the amount you can remortgage for could change as well.

Landlords who own properties in limited companies tend to remortgage on a regular basis. As the value of their properties increase, they take money out of that equity to make further investments.

How can a mortgage broker help here? Is there anything else to add?

There are lots of Buy to Let lenders that will lend to limited companies. If your circumstances are complex, there are also plenty of specialists that cater for unique situations. Many of these lenders are broker-only, so it’s absolutely worth speaking to us to see how we can match you with the right lender.

Also, we always talk to clients thinking about doing this about whether they have factored in all the additional costs and admin. We’ll work with you and explain what’s required, so that you go in with your eyes wide open.

YOUR HOME IS AT RISK IF YOU FAIL TO KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER LOANS SECURED AGAINST IT

BUY TO LET MORTGAGES AND COMMERCIAL LENDING ARE NOT USUALLY REGULATED BY THE FINANCIAL CONDUCT AUTHORITY

FOR SPECIALIST TAX ADVICE PLEASE REFER TO AN ACCOUNTANT OR TAX SPECIALIST