Buy-to-Let Mortgage through Limited Company

Advantages & disadvantages of the Limited Company loan

Landlords can expand their BTL portfolios via a corporate setup, which may present a number of benefits. At MFS, we can work with applications via limited and trading companies, as well as a range of other business types. Our limited company buy-to-let mortgages will cater to the needs and complexities of your company, which should result in a smooth underwriting process, and allow you to focus on the repayments on your mortgage.

But, given the potential added complications of lending to a limited company, as opposed to an individual borrower, there may be added due diligence. This extra due diligence may threaten to slow down the deal. However, while high street lenders may not have the capacity for these difficulties, MFS works with portfolio landlords with tricky backgrounds on a daily basis. Your application will be underwritten from day one, meaning that if anything risks slowing down your loan, your underwriter will be in touch asap to let you know and find a solution. To find out if investing through a limited company is the best option to you, it would be best to seek out a qualified financial advisor.

Are there limitations on the types of properties?

No, so long as the property (or properties) is based in mainland England or Wales, our limited company Buy-to-Let mortgages cover the same types of properties our individual mortgages do. This includes residential assets, new builds, student lets, MUFBs of up to 30 units and more.

Are there any additional elements to the assessment process for a Buy-to-Let mortgage through a limited company?

We assess every one of the enquiries on their own merits and features. But there may be additional due diligence placed on those getting a Buy-to-Let mortgage as a limited company. We may review the shareholder details, or look into the company’s home country if it’s based overseas, for example.

Can I apply for a limited company buy-to-let mortgage?

You’ll be able to apply so long as you have a deposit of at least 25%. What’s more, you have many routes available for getting the ball rolling. Initial enquiries can be made over the phone, online, or via email.

Can I apply if my company is not based in the UK?

Yes, generally all of our products are available to borrowers from anywhere in the world, other than sanctioned countries. This includes expats, foreign nationals, offshore companies, and offshore trusts.

Aside from limited company Buy-to-Let mortgages, does MFS work with any other corporate setups?

Yes, our Buy-to-Let mortgages are also available for LLPs, SPVs, self-employed workers and more.

How many mortgages can I have?

We place no limits on how many BTL mortgages you could apply for. We have a range of options available for landlords who may be making substantial investments or are planning to expand quickly. For example, our Buy-to-Let mortgage through a limited company can be used for MUFBs of up to 30 units, and multiple properties can be invested in via a single loan where suitable. Your underwriter will be able to break down any limitations or requirements that we have for our mortgages. This could include personal guarantees, age limits, etc.

Can I re-mortgage my buy-to-let investment?

Yes, in fact, you may be able to refinance onto one of our bespoke bridging products dependent on your future plans. We have a range of options available to support property investments with their long-term goals. For example, our permitted & light development bridging loans can allow you to spruce up your property for new tenants, while our complex bridging loans can help you address any unforeseen complications that may emerge.

Do I need to use a mortgage broker?

We’re able to issue our limited company BTL loans to direct borrowers as well as brokers. But, if you’re unsure of your next steps, at least speaking with a mortgage broker could help. Their expertise of the market could help illuminate the path ahead, remind you of the purpose of buying a BTL property in the first place, and provide you with a range of options.

Utilising a broker could also help with the mortgage application itself. Given their experience, brokers may be able to do a lot of the leg work for you, and guide you through the process. However, they will levy fees and charges for this service, which could eat into the returns your buy to let property generates. You will need to determine if a mortgage broker works for your situation, and your budget.

Do I get Buy-to-Let tax relief?

Prior to 2020, landlords were able to claim tax relief on their mortgage interest payments. But, a new tax credit system, which many believe is less generous, has now replaced the old relief rules. However, BTL landlords may be able to save on their tax costs by investing through a limited company as they can present a number of other tax perks.

For example, as a business owner, you’ll pay corporation tax on your profits, which could be favourable to paying income tax. These tax rules can be complicated though, and MFS is not a financial advisor, nor do we offer accountancy services. If you need guidance on any tax concerns, you should seek external advice.

Does the company need to pay stamp duty?

Stamp duty is charged at 15% on residential properties costing over £500,000 bought by certain corporate bodies or “non-natural persons”, as HMRC puts it. These include companies, partnerships, and collective investment schemes.

But, there may be relief available if the property is used in a property rental business, bought by a property developer or trader, or other circumstances. The conditions for these reliefs can be complicated and so you will want to work with experts in the field to determine what you may owe in stamp duty.

Generally, there is a 3% surcharge on residential properties bought by companies. There is also a 2% surcharge on residential properties bought in England and Northern Ireland by non-UK residents.  This 2% surcharge applies on top of all other residential rates of SDLT, including the 3% higher rate surcharge.

Property investors and landlords may opt to invest through a limited company, rather than as an individual. This may bring with it certain tax advantages and other perks. But, with these benefits also comes potential complications. Attaining a Buy-to-Let mortgage through a limited company may require extra due-diligence on the lender’s part.

Fortunately, at MFS, we have limited company Buy-to-Let mortgages available that we created specifically with corporate setups in mind. Our mortgage will factor in your background as well as your business’ operations. This enables us to deliver the funds you need to invest in English or Welsh property.