Know the Lender Rules Before You Form the Company
A limited company buy to let mortgage is a loan made to a company and not to you personally, so the company owns the property, collects the rent and repays the lender. Most lenders want that company to be a special purpose vehicle, usually shortened to SPV, set up only to buy and let property, and almost all of them will ask the directors to guarantee the loan personally.
Interest in the structure has grown because of tax, and tax is where most of the headlines sit. For a landlord, though, the first question is whether a lender will lend and on what terms. This guide covers how limited company buy to let mortgages work, what lenders look at, a worked rental cover example, how a purchase differs from a remortgage, and a short section on whether the structure still makes sense in 2026.
How Limited Company Buy to Let Mortgages Work
The borrower is the company. It buys the property, appears on the title and receives the rent, and the mortgage is secured against the building as with any other loan. What changes is who the lender is really relying on.
A new SPV has no trading history, so the lender looks through it to the people behind it, which is why directors are usually asked to give personal guarantees and why their credit files, assets and landlord experience still matter.
SPV is the structure lenders like best: a company formed to buy, hold and let property, with a property-related SIC code such as 68100 or 68209 showing on its Companies House record. Try borrowing through a company that also trades in something else and you will usually find fewer lenders willing to look at it, and the case takes longer to place.
Ownership matters as well. Lenders want to know who the directors and shareholders are, and their rules differ on how many shareholders they accept and whether anyone with a meaningful share has to be a director and sign a guarantee. It is far easier to settle that before the company is formed than after.
What Lenders Look At
Rental cover is where lenders start. They test whether the expected rent comfortably exceeds the interest on the loan, usually at a stress rate above the one you will really pay.
For a limited company the cover asked for is commonly 125 percent, a lower hurdle than the 145 percent often applied to higher-rate taxpayers borrowing in their own names, although every lender sets its own figures and its own stress rate.
That test, and not your salary, normally decides how much the company can borrow.
On deposit, 25 percent is the usual minimum, so the loan tops out at around 75 percent of the value. A few lenders will take a little less on a property with a strong energy rating. Putting in more is not only about the size of the loan either, because a smaller loan needs less rent to pass the cover test, as the worked example below shows.
Lenders also look hard at the people behind the company. Each director’s credit file, address history and landlord experience gets checked, and adverse credit that might be shrugged off on a personal application can narrow the field much more sharply here. We have written up a limited company buy to let purchase where adverse credit surfaced after the Decision in Principle, and it shows how a case like that was re-sourced.
The property itself matters too. Ordinary houses and flats rarely cause trouble, but HMOs, multi-unit blocks, short leases and homes with a weak energy rating are treated differently from one lender to the next. Our article on energy efficiency requirements and buy to let lending explains why the rating can change what you are able to borrow.
A Worked Example: Same Property, Three Outcomes
Take a £250,000 property that will let for £1,250 a month, bought through an SPV with interest-only cover tested at 125 percent. These figures are illustrations, because every lender sets its own test rate and cover ratio.
With a 75 percent loan of £187,500 and a test rate of 5.5 percent, the monthly interest on the lender’s test is £859. At 125 percent cover the rent has to reach £1,074, so £1,250 clears it comfortably, at about 145 percent.
Move the test rate to 6.5 percent and the same loan produces interest of £1,016 and a required rent of £1,270. The £1,250 now falls just short at about 123 percent, and nothing about the property, the tenant or the borrower has changed except the lender’s test.
Reduce the loan to 70 percent, which is £175,000, and keep the 6.5 percent test. Interest drops to £948, the required rent to £1,185 and the case passes at about 132 percent. An extra £12,500 of deposit turned a decline into an offer.
That is why the numbers should be run against several lenders’ test rates before an application goes in. The right lender, a slightly larger deposit or a modest rent increase often decides the outcome. You can run your own property through our buy to let mortgage calculator before you speak to a lender.
Limited Company or Personal Name?
On the mortgage side, limited company deals usually cost more than comparable personal buy to let products, with higher rates and arrangement fees and a narrower range to choose from. Against that, the structure keeps personal and property finances apart and, for many landlords, changes the way profit is taxed.
Tax is the reason most landlords ask about the structure, so here is the short version.
Section 24 restricts how individual landlords relieve mortgage interest, giving a basic-rate tax credit instead of a full deduction. It does not apply to companies, which treat interest as a business cost and pay corporation tax on profit, currently 19 percent on profits up to £50,000 and 25 percent above £250,000, with marginal relief in between.
From 6 April 2027, property income for individuals moves onto its own rates of 24, 44 and 49 percent, which widens the gap on paper.
The picture is not one-sided. Profit taken out of the company as dividends is taxed again in your hands, the company has accounts and filings to maintain, and higher Stamp Duty rates apply to purchases made by companies.
Whether the structure comes out ahead depends on your income, how many properties you hold, how much profit stays in the company and how long you plan to hold.
We are not tax advisers, so speak to a qualified accountant before deciding. For the wider picture in 2026, see our guide to what the buy to let market really looks like for landlords.
Buying or Remortgaging Through a Company
Starting from scratch with a purchase is the easy case. You form the company, pay in the deposit, and the lender looks at a single property plus the people behind it.
Mind where the deposit comes from, though. Money you lend to your own company will normally need recording as a director’s loan, and some lenders want that loan to rank behind theirs.
One of our write-ups covers an SPV purchase funded by a directors’ loan and how it was handled.
Bringing in properties you already own is a different job altogether. The company is a separate legal person, so moving a property into it normally counts as a sale at market value, and that can bring Capital Gains Tax and Stamp Duty bills with it.
On top of the tax there are practical hurdles: your current lender has to agree, early repayment charges may apply and every property needs a fresh valuation.
The new company loan clears the old ones, so the rental cover has to stack up across the whole portfolio and not property by property.
Please take tax and legal advice before signing anything. We cover the refinancing angle in our piece on capital gains tax and buy to let refinancing.
Landlords with four or more mortgaged properties are usually treated as portfolio landlords and asked for a schedule of the lot, showing balances, rents and which lender holds each one. Pull that together before the first call and you will save yourself a week of back and forth.
What You Need to Apply
Two piles of paperwork are needed, one for the company and one for each director. For the company that means the certificate of incorporation, the Companies House record showing a property SIC code, the articles and a note of who owns the shares. A company that already owns property adds current mortgage statements and tenancy agreements.
Directors bring the usual personal documents, such as ID, proof of address and bank statements, plus evidence of income where it is relevant. Our guide to the documents needed for a mortgage application goes through each of them. If you are buying, add proof of where the deposit came from and any director’s loan paperwork.
Mistakes That Stall a Case
Forming the company first and asking questions later is the commonest slip. Get the SIC code wrong, or give shares to someone who is not a director, and some lenders drop out before you have even started, and putting it right afterwards costs both time and fees.
Guarantees come next. A lot of directors assume limited liability keeps their own assets out of it, and are surprised when the offer arrives with a personal guarantee attached. Read that wording carefully before you commit to anything.
Then there is the deposit trail. Cash that lands in the company’s account days before the application, with no paperwork behind it, will be queried, and pulling the answer together takes days.
Last, and often missed, is adverse credit on one of the directors. It is far better to mention it at the outset, so the case goes to lenders who will look at it, than to have it surface after the first decline.
How a Broker Helps With Limited Company Buy to Let
Limited company lending is a specialist corner of the market where lenders differ far more than they do on residential mortgages. Each sets its own test rate, cover ratio, maximum loan size and view on guarantees, shareholders, HMOs and portfolios, so a decline from one lender tells you very little about the next.
A whole-of-market mortgage broker who deals with these lenders daily can tell you beforehand which are likely to say yes to your set-up, check the rental cover against their numbers and place the case once.
Worth knowing too: buy to let lending to a company is generally not regulated by the FCA in the way residential mortgages are, so you should understand exactly what you are signing.
Frequently Asked Questions
Can a limited company get a buy to let mortgage?
Yes.
A UK limited company, usually an SPV, can borrow to buy or remortgage rental property, with the directors typically giving personal guarantees and the rent servicing the loan.
What is an SPV?
A special purpose vehicle is a limited company formed only to buy, hold and let property.
Lenders generally like them and look for a property-related SIC code, such as 68100 or 68209, on the Companies House record.
Do I need to give a personal guarantee?
Almost always.
Lenders usually ask each director, and often any shareholder with a meaningful stake, to guarantee the loan personally, so the company’s limited liability does not shield you from the mortgage.
What deposit do I need for a limited company buy to let mortgage?
Usually at least 25 percent of the property value.
A few lenders accept slightly less on energy efficient properties, and a larger deposit also eases the rental cover test.
Are limited company buy to let mortgage rates higher?
Often yes.
Rates and fees on limited company deals tend to sit above comparable personal buy to let products, and the choice is narrower, so the extra cost needs weighing against the tax and structural benefits.
Can I move my existing buy to let properties into a limited company?
Yes, but it is not a simple switch.
The transfer is usually treated as a sale to the company, so Capital Gains Tax and Stamp Duty may apply, along with your existing lender’s consent and any early repayment charges. Take tax and legal advice first.
Does Section 24 apply to limited company landlords?
No.
Section 24 restricts mortgage interest relief for individual landlords, while companies treat interest as a business expense and pay corporation tax. We are not tax advisers, so check how this applies to you with an accountant.
Final Thoughts
Getting the structure and the rental cover right before you apply saves a lot of rework. Our advisers will look at your company, deposit and rental figures with you and tell you which lenders are realistic, before you commit to an application.
UK Mortgage Broker is a whole-of-market broker helping clients throughout the UK and globally to secure funding on UK property. We are directly authorised and regulated by the Financial Conduct Authority.
Your property may be repossessed if you do not keep up repayments on a loan secured against it. Buy-to-let and other business-purpose lending secured against investment property is not regulated by the Financial Conduct Authority.
Call: +44 1628 969 500
Email: info@uk-mortgagebroker.co.uk
Related Pages
- Complex Income Mortgages – how lenders treat director, dividend and other income that is harder to evidence.
- How to Get a BTL Mortgage with Low Deposit? – how deposit size changes lender choice and the rent you need to show.
- Remortgage UK – when remortgaging makes sense and how the process works.
- Bad Credit Mortgages UK – specialist advice for borrowers with adverse credit history.
- Let to Buy Mortgages – keeping your home as a rental while you buy your next one.