Best Buy-to-Let Mortgage Rates for Limited Companies

Buy-to-let limited company mortgage rates explained

A buy-to-let limited company mortgage is a type of loan that can be used by limited companies (and limited liability partnerships) to purchase rental properties.

As with standard residential and buy-to-let mortgages, interest is charged on the amount borrowed at either a fixed rate (which is guaranteed to remain the same over a set term) or a variable rate (which can be changed by the lender). While sometimes more expensive than traditional buy-to-let mortgage rates, getting a buy-to-let mortgage as a limited company can come with specific tax benefits that may appeal to some borrowers.

What’s more, getting a buy-to-let mortgage through a limited company can help to limit personal liability as both the property and the debt will belong to the business – rather than an individual. These factors make them a popular option among landlords; in 2025 alone, over 66,000 new companies were established to oversee buy-to-let property, according to estate agent, Hamptons. Compare a selection of buy-to-let mortgages for limited companies using our chart above or continue reading to learn more.

Buy-to-let limited company mortgages: Getting started

Buy-to-let limited company mortgage eligibility criteria

To get a buy-to-let limited company mortgage, you’ll need to have incorporated as a UK-registered limited company or limited liability partnership (usually with the SIC codes 68100 or 68209). However, keep in mind that some lenders may only deal with special purpose vehicles (SPVs).

Just the same as any other type of mortgage, you must have a deposit (typically around 20% of the property’s value) and a good credit history. Most lenders will also ask for proof your income will sufficiently cover mortgage repayments (even if circumstances change) by passing Income Coverage Ratio (ICR) and other rental stress tests. A rental income equivalent to 125% to 145% of your mortgage interest is normally seen as standard in the buy-to-let market.

A lender may also require you to sign a personal guarantee (sometimes referred to as a ‘director guarantee’). This is a document that holds you (or a director) personally responsible for repaying the debt if the company was to default on repayments or become insolvent. Learn more about personal guarantees.

Should I set up a limited company before applying for a mortgage?

Yes – if you want to get a limited company buy-to-let mortgage, you’ll first need to set up a limited company or limited liability partnership. As previously mentioned, it’s worth bearing in mind that some lenders will only accept applications from SPVs.

Can other types of businesses get a buy-to-let limited company mortgage?

As the name suggests, limited company mortgages are only available to limited companies and limited liability partnerships. If your business has another type of ownership structure (e.g. a sole trader), you’ll need to set up a new limited company or limited liability partnership to get one of these deals.

Setting up a buy-to-let limited company for beginners

There are minimal steps to setting up a buy-to-let limited company, and it can be a fairly straightforward process if you’re well-prepared:

1. Register as a limited company with Companies House

The first step is to register as a limited company with Companies House – also known as ‘incorporating’. This involves completing an online application form and it usually takes less than 24 hours for your company to officially be registered. It’s also possible to register your company via post – but this takes longer (typically between eight and 10 days).

Applying online costs £100 and can be paid by either debit or credit card, while registering by post comes at a slightly higher price of £124 (which can be paid via cheque).

As part of your application, you’ll be asked to provide:

• A name for your company: You can check whether a name is available with Companies House.
• A company address: Although it could be your home address, remember this information will be easily accessible on Companies House.
• Details of directors and shareholders/guarantors: Your company must have at least one director and one shareholder or guarantor. A shareholder/guarantor can also be a director.
• Details of people with significant control (PSC): This is anyone with more than 25% of shares or voting rights in your company.
• A standard industrial classification (SIC) code: Select the SIC code that best describes the purpose of your business. For buy-to-let limited companies, this will often be the SIC codes 68100 (buying and selling of own real estate) or 62809 (other letting and operating of own or leased real estate) - although others may apply.
• Documents agreeing how to run the company: This includes the ‘memorandum of association’, ‘articles of association’, ‘statement of capital’ and ‘statement of guarantee’.

While you can complete these steps yourself, an accountant or solicitor could help to guide you through the process.

2. Register for corporation tax

Once your company has been incorporated, you must register for corporation tax within three months – or risk facing a penalty. This can also be carried out via Companies House – either at the same time as registering a limited company or by adding Corporation Tax services to your business tax account.

To register for corporation tax, you’ll need to provide:

• Your company’s registration number
• The date you started to do business
• The date your first accounts are made up to
• Your company’s 10-digit Unique Taxpayer Reference (UTR) – normally sent to your company address within a few days of incorporation.

3. Transfer properties to your limited company (optional)

If you already own buy-to-let properties, you’ll have the option to transfer these to your limited company once it’s been registered. Importantly, this involves selling the properties to your company which might trigger Stamp Duty and Capital Gains Tax.

4. Open a business bank account

You’re legally required to have a separate business bank account if you operate any kind of limited company or limited liability partnership (including buy-to-let limited companies). On the plus side, this can make it easier to keep track of business expenses and complete tax returns.

Many providers offer additional benefits with their business current accounts – such as access to exclusive savings rates, specialist support and cashback on spending. Explore business bank accounts.

If I buy through a limited company, am I still a first-time buyer?

You’ll still be considered a first-time buyer even if your first purchase is a buy-to-let property through a limited company. However, it should be noted that you won’t qualify for first-time buyer stamp duty relief.

Also keep in mind that you’ll no longer be considered a first-time buyer if you own a buy-to-let property and later want to purchase a first home of your own.

Does first-time buyer status affect limited company mortgage rates?

Being a first-time buyer could make it difficult to find and compare buy-to-let mortgage rates for limited companies. This specialist sector is already less competitive than the standard buy-to-let mortgage market and, as inexperienced borrowers are often perceived as riskier by lenders, there may be even fewer options for first-time buyers.

Furthermore, most mortgages for first-time buyers tend to charge higher rates than those available to other types of borrowers. It may therefore be beneficial for first-time buyers set on securing a buy-to-let limited company mortgage to speak to a broker for help finding the right deal.

Buy-to-let limited company mortgages and tax liabilities

One of the main reasons someone might use a limited company to get a buy-to-let mortgage is due to the tax benefits.

Over the past decade, landlords have been greatly affected by changes to the way they are taxed. It used to be the case that individual landlords could deduct the interest paid on their mortgage from their rental income so they’d only be taxed on profit after expenses, however, this was phased out from April 2017. Since April 2020, individual landlords have had to pay tax on the entirety of their rental income at their usual rate of income tax.

While the Government introduced a 20% tax credit on mortgage interest (set to rise to 22% from April 2027), this isn’t nearly enough to offset the amount of tax paid by higher- and additional-rate taxpayers (currently 40% and 45%, respectively) so many lose money to tax. It’s perhaps unsurprising, then, that there’s been a 363% increase in the number of buy-to-let companies set up over the past 10 years (since 2016, according to estate agent, Hamptons).

What’s more, with the Government set to raise income tax on rental profits by two percentage points across all bands from April 2027 (to 22% for basic-rate taxpayers, 42% for higher-rate taxpayers and 47% for additional-rate taxpayers), it could be more landlords consider setting up a limited company.

Do limited companies pay stamp duty on buy-to-let properties?

Yes, limited companies still need to pay stamp duty land tax (SDLT) when purchasing a buy-to-let property – just the same as individual landlords.

Stamp duty on buy-to-let properties for limited companies (UK guide)

The amount of stamp duty you’ll pay depends on the value of the property you’re purchasing and how many properties you already own.

Those who already have at least one residential property will need to pay an extra 5% on top of the standard SDLT rates when purchasing another (even if it’s a buy-to-let investment). These rates are the same for both individuals and companies:

Do you pay capital gains when transferring property to a company?

Yes, you’ll normally need to pay Capital Gains Tax (CGT) when transferring a property to your buy-to-let limited company, as you are effectively selling your investment to your business.

The amount of CGT you’ll pay depends on your income tax bracket and how much the property’s value has increased since it was initially purchased. For instance, higher- and additional-rate taxpayers will pay 24% on their gains, while basic-rate taxpayers must pay 18% on gains that fall within their income tax band (and 24% on amounts over this threshold).

It’s also important to consider any additional costs you might face, such as the legal fees and stamp duty payable when your company ‘purchases’ the property.

What yield would I get buying via a limited company vs personally?

Rental yield can vary enormously between landlords, as it depends on a wide range of factors including how many properties they own, the property types and locations, as well as how much they charge their tenants.

That being said, higher- and additional-rate tax-payers may find their yield after tax is larger when using a buy-to-let limited company, as this can reduce their overall tax burden.

Is a limited company always more tax-efficient for buy-to-let?

Setting up a buy-to-let limited company is often more tax-efficient if you’re a higher- or additional-rate taxpayer. However, it’s important to weigh up any savings against the cost of setting up a limited company, the CGT and stamp duty payable for transferring properties to the company, as well as the potential for higher interest rates in this corner of the buy-to-let market.

But, buy-to-let limited companies aren’t always more tax-efficient. For instance, they’re probably a less tax-efficient option for most basic-rate taxpayers – especially when considering all the possible extra costs. This is because basic-rate taxpayers pay 20% income tax, while corporation tax rates range from 19% to 25%.

Furthermore, setting up a buy-to-let limited company may be an impractical and expensive option for landlords with smaller portfolios. Therefore, it’s a good idea to seek tailored financial advice to work out whether a buy-to-let limited company is best-suited to your scenario.

Other considerations with buy-to-let limited company mortgages

Although setting up a buy-to-let limited company can have certain tax advantages, it’s important to consider whether this process best meets your needs.

Can I switch a residential mortgage to a buy-to-let owned by a limited company?

Yes, it’s possible to switch from a residential mortgage to a buy-to-let mortgage for limited companies. But, bear in mind this is achieved by selling the property to your company which could come with costs such as:

• Capital Gains Tax
• Stamp duty
• Legal fees
• Early Repayment Charges (ERCs)
• Cost associated with setting up a limited company

Can I live in a property owned by my company?

While you can live in a property owned by your limited company, it’s not usually recommended. Unless you pay commercial rent at a fair market value, this would likely be considered a Benefit in Kind (BIK) under HMRC rules (i.e. a non-cash perk offered to employees of a company) and treated as taxable income.

Furthermore, if you ever wanted to move home, you’d need to pay corporation tax on the sale of your property (which doesn’t apply to personal property sales). To make matters worse, it might also be considered a breach of contract if the property was purchased using a buy-to-let mortgage.

What happens if I need to take money out of the company?

There are a few ways to extract money from a buy-to-let limited company, but perhaps the most common are to pay yourself a salary or dividends.

A salary is considered a tax-deductible business expense, however, you’ll still need to pay national insurance and income tax on any amount above your Personal Allowance. What’s more, earning above a certain threshold (when combined with other income streams) could push you up the tax ladder and result in higher overall tax bills.

Meanwhile, dividends come from your company’s post-corporation tax profits (and therefore can’t be deducted as a business expense). You may also be taxed on the dividends you receive if they exceed your Personal Allowance and yearly dividend allowance (£500 per year) – which effectively means you could pay tax twice on your rental profits.

It may be worth seeking advice on the most tax-efficient way of getting your hands on the cash in your buy-to-let limited company.