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You are here: Home / Mortgages / Buy to Let Mortgage / First Time Landlord Limited Company Buy to Let Mortgage

by Payam Azadi

First Time Landlord Limited Company Buy to Let Mortgage

Landlord Limited Company Buy to Let Mortgage

Understanding limited company buy to let mortgage products for First time landlords is going to be key in 2017.

Payam AzadiThis article is aimed at entrepreneurs who are looking to get into the buy to let market with the use of a Limited company buy to let mortgage. Niche Advice arranges limited company buy to let mortgages and is NOT a tax specialist so we recommend that you would need to speak professional help in this regard.

As a first time landlord you have no legacy preventing you from of holding your properties under a limited company, which can have the following advantages:

  • Company profits will be taxed at corporation tax rates.
  • Drawn income may be from directors’ remuneration (utilising the personal allowance) and dividends which are at a lower rate than income tax.
  • Greater amount of property and interest charges may be able to be offset.
  • Multiple limited companies can be used to cross-subsidise management expenses.
  • Simplifies the addition and removal of share/title holders, and succession planning.
  • The buy to let mortgage rental coverage calculations may be lower as recent PRA recommendations are aimed predominantly at protecting ‘individuals’ rather than companies.

Most Buy to Let Mortgage Lenders will usually look for the limited company to be a ‘special purpose vehicle’ (SPV) designed wholly for property with specific SIC code permissions. The setting up of a company is fairly straight forward and your tax specialist should be able to guide you further in this regard. For newly formed SPVs the Buy to Let Lender may request personal guarantees from the directors for their added protection, and underwrite on established earnings outside of the business.

Buy to let limited company mortgage is typically limited to 4 directors with 25% minimum deposit being the norm.

 

Example Product Rate and Fees – First Time Landlord Limited Company Buy to Let Mortgage

Initial Rate: 2.59%
Subsequent: 5.00%
The overall cost for comparison 4.87% APRC

The total amount you must pay back, including the amount borrowed is £498,011.12

Features:Buy under a newly formed SPV limited company. There could be tax advantages but you will need to seek independent advice.

Type and initial benefit period Fixed for 5 years
Minimum deposit / equity: 25%
Valuation fee £FREE
Booking fee £0
Lender arrangement £1999
Telegraphic transfer / CHAPS fee £18
Legal fee TBC
Early repayment charge 3/2/2/2/2% of the amount repaid in the fixed period

 Make an enquiry Online

If you’re looking for a First Time Landlord Limited Company Buy to Let Mortgage products then it is wise to seek professional help from a Buy to Let Specialist Broker such as Niche Advice. Please complete the online enquiry form or call 020 7993 2044.


Any property used as security, which may include your home. may be repossessed if you do not keep up repayments on your mortgage


Important Information

Residential and Buy to Let Mortgages

Rates current as at 26/07/2019. The overall cost for comparison is based on an open market value of £300,000 over a 25 year term. Right-to-Buy examples are based on a discounted purchase price of £200,000. Repayment for Residential and Interest only for Buy-to-let (unless otherwise specified). Eligibility will depend on your own personal circumstances.

KEY – ERC = Main early repayment charge.

The purpose of this web is for information only and is based on a fictitious illustrative scenario. It does not constitute a Mortgage Offer in any way.

It is essential that you seek independent mortgage advice as a suitable product will be based on your own individual circumstances. An interest rate should not be read in isolation, and you should refer to your personal key facts illustration and Mortgage Offers for full terms and conditions. If anything is unclear it should be discussed fully with both your mortgage and legal advisors before entering into a mortgage contract with the lender.

The information contained herein is based on research through the Trigold (IRESS UK) sourcing system. When first published to this site the data is normally 24 hours behind real time, and may or may not still be available.

A first charge over your property is required as security for the loan.

The formal mortgage offer of an advance will be subject to a valuation and other satisfactory references.

Payam Azadi

Author: Payam Azadi

Payam Azadi is a partner at Niche Advice who are whole of the market Independent Mortgage Brokers. His role is very much focused on Property financing both on residential and commercial lines. To get in contact with him please click here.

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Filed Under: Buy to Let Mortgage

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AS A MORTGAGE IS SECURED AGAINST YOUR HOME OR PROPERTY, IT COULD BE REPOSSESSED IF YOU DO NOT KEEP UP THE MORTGAGE REPAYMENTS.

If you are thinking of consolidating existing borrowing you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.

Niche Advice Limited is a Credit Broker and does not lend money directly to clients. Niche Advice Limited is authorised and regulated by the Financial Conduct Authority. FCA Number: 750263.

Commercial Buy-to-Let and commercial mortgages are not regulated by the Financial Conduct Authority.

Our Fees

Click here for our fees structure. A full detailed fee plan will accompany all our quotes.

Niche Advice Limited has a commercial arrangement under an affiliate programme with Check My File and is remunerated for referrals.

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If you wish to register a complaint, please write to us on the details below or call us on: 020 7993 2044.

Correspondence Address: Niche, Unit F6, The Addington Business Centre, Vulcan Way, New Addington, Surrey CR0 9UG.

A summary of our internal complaints handling procedures for the reasonable and prompt handling of complaints is available on request and if you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service at www.financial-ombudsman.org.uk or by contacting them on 0800 0234567.

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Tel: 020 7993 2044

Registered Office: Niche, Unit F3, The Addington Business Centre, Vulcan Way, New Addington, Surrey CR0 9UG. Registered in England & Wales. Company registration number: 06599033.

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