Published 4 July 2016 · Last reviewed 1 May 2026
Set up a limited company buy to let with the help of a mortgage
The Chancellor George Osbourne announced today a potential drop in corporation tax to 15% which has brought back sharply into focus the advantages of limited company buy to lets, and in this mortgage article we will explore the financing of them.
Limited company buy to let mortgages are not normally offered by the usual buy to let mortgage providers or indeed the high street lenders. It is likely that the limited company will need to be set up for the sole purpose of buy to lets and your Accountant should be able to guide you on the company permissions needed.
What are main differences between a limited company buy to let and a standard buy to let mortgage?
Limited company buy to lets mortgage requirements:
- Level of landlord experience is probably going to need to be greater for a limited company buy to let.
- The directors of the limited company may have to give personal guarantees.
- Potentially foreign nationals can be directors bypassing Visa restriction rules.
- The rates are higher and the knock on effect is the rental coverage needs to greater.
- The arrangement fees are likely to be a percentage rather than a flat fee. For example, 1.5% of the loan.
- Some Lenders will insist that the limited company only contains mortgages pertaining to them.
- Multiple shareholders so can exceed the normal stance of two applicants.
- You are likely to need to enlist a mortgage professional to help with the application process.
Can I transfer my buy to lets into the limited company without paying tax?
This is really a question for your Accountant but we do know applicants have moved properties from an individual name into a limited liability partnership for a short spell, and then onto the limited company to negate taxation.
Can I use limited company mortgages for multi let properties?
If you are planning to sub divide a freehold property into self contained flats, let to students or houses in multiple occupancy then this is definitely something the limited company buy to let lenders can accommodate.
Example of a limited company buy to let mortgage?
- 65% fixed until 31/10/2018
- Reverts to a variable rate which is 4.75% above LIBOR, currently 0.60%, thereafter to give a current rate payable of 5.35%.
- 38% APRC
- Minimum deposit 25%
- Arrangement fee £3,375
- Valuation fee £545
- Funds Transfer Fee £25
Based on a purchase price of £300,000 on an interest only loan basis over 25 years. Rate current as of 4/7/16. For a personalised illustration based on your circumstances please call.