If you’re a landlord with multiple properties, or you’re thinking about growing your portfolio, you’ve probably heard about limited company buy-to-let mortgages. Over the last few years, more landlords have been setting up limited companies to hold their properties, often for tax efficiency or to simplify managing larger portfolios.
But how do these mortgages work, and are they right for you? Here’s an overview of what you need to know.
What is a Limited Company Buy-to-Let Mortgage?
A limited company buy-to-let mortgage is a mortgage designed for landlords who purchase or hold their properties through a limited company, rather than in their personal name.
Instead of you personally being the borrower, your company becomes the legal borrower, although most lenders will still ask for a personal guarantee from the directors.
Why Portfolio Landlords Consider a Limited Company
Many landlords who grow beyond a few properties start exploring the limited company route because:
- Mortgage interest can often be treated as a business expense, which can be more tax efficient under certain circumstances
- Owning properties through a company can make it easier to separate your business finances from personal finances
- Selling or transferring properties can sometimes be more straightforward within a corporate structure
Tax rules can change, so it’s always worth speaking with a qualified tax adviser before making decisions about property ownership structures.
How Lenders View Portfolio Landlords
Portfolio landlords – usually defined as anyone with four or more mortgaged buy-to-let properties – are assessed differently to small-scale landlords. Lenders will typically look at:
- The performance of your existing portfolio, including rental income and loan-to-value ratios
- Your experience as a landlord and the size of your portfolio
- The financial stability of your limited company and personal finances
They may ask for a portfolio spreadsheet listing all properties, mortgages, and rental income to ensure the overall portfolio is sustainable.
Typical Requirements for Limited Company Buy-to-Let Mortgages
While each lender is different, most will ask for:
- A limited company registered with Companies House (often an SPV – Special Purpose Vehicle)
- Personal guarantees from company directors
- Details of your existing buy-to-let portfolio if you’re a portfolio landlord
- Evidence of rental income that meets the lender’s stress test
Having clear documentation and a well-managed portfolio makes the process smoother.
Pros and Cons of Limited Company Buy-to-Let Mortgages
Potential Benefits
- Can be tax efficient for higher-rate taxpayers (check with a tax adviser)
- Easier to build and manage a growing portfolio under one entity
- Future properties can be purchased directly through the company
Potential Drawbacks
- Mortgage rates can be higher than personal buy-to-let products
- Fewer lenders operate in the limited company space, which can limit options
- Additional costs for accountancy and company administration
How We Can Help
Whether you’re refinancing or starting from scratch, we can introduce you to buy-to-let mortgage lenders who work with portfolio landlords and limited companies. By understanding your property goals and company setup, we can explore which products you might be eligible for and guide you through the application process.
Get in Touch
Whether you already run a limited company for your properties or are considering setting one up, we can help you explore your mortgage options.
Your property may be repossessed if you do not keep up repayments on your mortgage.
The FCA does not regulate some forms of buy to let mortgages.
