Should I Get a Buy to Let Mortgage Through a Limited Company?
For higher-rate taxpayers and portfolio landlords, yes - tax savings typically outweigh higher rates. Basic-rate taxpayers with 1-2 properties may be better with personal mortgages.
Since the 2017 changes to mortgage interest tax relief (Section 24), many landlords now purchase BTL properties through a limited company structure. When you buy personally, you can only claim a 20% tax credit on mortgage interest. Through a company, you can offset the full interest against rental profits before paying corporation tax (19-25%). For a higher-rate taxpayer with significant mortgage costs, this difference can save thousands annually. The trade-offs include higher mortgage rates (typically 0.5-1% more), setup costs, accountant fees, and more complex administration. It's usually most beneficial for landlords earning 40%+ tax rate, those building a portfolio of 4+ properties, or those looking to pass properties to family tax-efficiently.
Tax treatment depends on individual circumstances and may change. This is not tax advice - consult a qualified accountant. Your property may be repossessed if you do not keep up repayments.
Key Points
- 1Full mortgage interest relief (vs 20% credit personally)
- 2Corporation tax 19-25% (vs income tax up to 45%)
- 3Mortgage rates typically 0.5-1% higher
- 4Need SPV with correct SIC codes (68100, 68209)
- 5Easier to add properties to existing company
- 6More complex administration and accountant costs
Eligibility Criteria
- SPV limited company with property SIC codes
- Personal guarantee usually required from directors
- Good personal credit (lenders assess directors)
- Minimum 25% deposit typically required
- Rental income to cover 125-145% of mortgage payment
Typical Timeframe
Setting up an SPV takes 1-2 days online. Limited company BTL mortgage applications typically take 4-8 weeks, similar to personal BTL timescales. Having your accountant confirm the company structure meets lender requirements speeds the process.
Next Steps
- 1Calculate tax position under both structures
- 2Speak to a property tax accountant
- 3Set up SPV with correct SIC codes if proceeding
- 4Gather personal and company documents
- 5Get advice from a specialist BTL mortgage broker
Why This Matters for Your Mortgage
Understanding these details helps you make informed decisions during the mortgage process. Every element of your application—from deposits to documentation—affects your approval chances and the rates you can access.
Lenders assess applications holistically, weighing multiple factors together. Knowing what they look for allows you to present the strongest possible application. This is particularly important for non-standard situations where lender criteria varies significantly.
Ready to discuss your options?
FCA regulated advice tailored to your situation
Related Questions
For more detailed information about this topic, visit our comprehensive guide:
Buy to Let Hub
Content reviewed: January 2026
CeMAP awarded by The London Institute of Banking & Finance. Cert CII (MP) awarded by the Chartered Insurance Institute.