If you want to invest in a property, you can't use a normal residential mortgage. Instead, you need a buy to let (BTL) deal.
Around a quarter of BTL mortgages can be used for buying property through a limited company. The rest can only be used for investing in property in your own name.
You can find a buy to let business mortgage using this comparison, which only includes deals that allow you to invest in property through a limited company..
How do business buy to let mortgages work?
Instead of personally owning buy to let properties, you own properties through a limited company instead. This company is called a special purpose vehicle (SPV), which means it is set up only for the purpose of owning investment properties.
After setting up a property company for buy to let, you pay money into the company, which is used as a deposit on properties you buy. The rest of the purchase price can be covered by a mortgage.
Tax when you buy to let through a limited company
If you invest in buy to let property in your own name, you have to pay:
Capital gains tax if you make a profit when you sell the property
Stamp duty land tax
Tax on your rental income
Buying property by setting up a limited company for buy to let means you are not taxed as an individual. You pay corporation tax instead, which can work out cheaper in some cases.
You still have to pay stamp duty for limited companies buying property. Here is how to work out if it is cheaper to buy to let through a company or by investing in your own name.
Yes, but this would involve transferring your buy to let property into a company first. Selling your property this way could come with taxes and stamp duty on the transfer of property to a limited company.
How to choose the right commercial buy to let mortgage
When you choose a mortgage deal, you need to decide if you want:
A fixed, tracker or variable rate deal. Deciding the type of interest rate you want affects how much you pay and if you are protected from rate rises.
A longer or shorter mortgage term. A longer term means your monthly payments are lower, but a shorter term can save you money in the long term.
An interest only or repayment mortgage. Interest only deals cost less per month, but you need to save up separately to pay off your mortgage or sell your property when the mortgage ends. Here is how to decide.
Check limited company buy to let mortgage rates
Some lenders charge different rates on their mortgages if you apply as a limited company rather than as an individual landlord. Interest rates on these mortgages are usually higher, so use our comparison to find the best deal.