In 2025, more landlords and property investors are choosing to purchase and refinance properties through a limited company structure. The reasons? Better tax efficiency, increased portfolio flexibility, and more accommodating lender options tailored for special purpose vehicles (SPVs).

This shift is especially important for higher-rate taxpayers or landlords looking to scale beyond a handful of properties.

Key Advantages of a Limited Company Mortgage

✅ Corporation Tax Benefits
Rental profits in a company are taxed at corporation tax rates (currently 25%) rather than individual income tax rates of up to 45%. This can result in significant savings for higher earners.

✅ Full Mortgage Interest Deduction
Companies can deduct 100% of mortgage interest from rental income before tax—something individual landlords can’t do due to Section 24 restrictions.

✅ Easier Portfolio Growth
SPV structures are cleaner for lenders to assess and make it easier to separate personal and business liabilities.

✅ Legacy and Inheritance Planning
Ownership through a company can simplify succession planning, allowing you to gift or sell shares rather than entire properties.

What Lenders Look for in 2025

While more lenders are offering limited company buy-to-let products, they do have specific criteria. Most will require:

• A Special Purpose Vehicle (SPV) company with SIC codes aligned to property letting or management (e.g. 68209)
• A personal guarantee from directors
• A minimum deposit of 20–25%
• Experience as a landlord (though some accept first-timers)

🔍 Typical Limited Company Mortgage Features

Ownership Type:
Properties owned by an SPV limited company, typically newly incorporated or dormant prior to purchase.

Interest Rates:
Slightly higher than individual BTL rates, though the tax savings often outweigh this.

Loan-to-Value (LTV):
Up to 80% for standard BTL; 70–75% for HMOs or specialist properties.

Mortgage Terms:
Similar to personal BTLs: 2, 5, or 10-year fixed rates available.

Rental Coverage Requirement:
Stress-tested using higher interest rate assumptions (e.g. 125–145% at 5.5–6%).

Limited Company vs. Personal Name Ownership

Tax on Profits

• Limited Company: 25% Corporation Tax
• Personal Name: Income Tax (20–45%)

Interest Deductibility

• Limited Company: 100% mortgage interest deductible
• Personal Name: Limited due to Section 24

Legal Ownership

• Limited Company: Held by company
• Personal Name: Held personally

Inheritance Planning

• Limited Company: Share transfer options
• Personal Name: Direct property ownership

Mortgage Availability

• Limited Company: Growing, especially for SPVs
• Personal Name: Wider, but less tax-efficient

Admin Requirements

• Limited Company: Annual accounts, bookkeeping needed
• Personal Name: Simpler reporting

Is It Right for You?

If you’re planning to grow a portfolio, fall into a higher income tax bracket, or want to build a long-term legacy, using a limited company could be significantly more efficient.

However, you’ll need to consider:

• Additional costs (accounting, admin, legal)
• Slightly higher mortgage rates
• Mortgage products limited to company applicants

A qualified broker can help compare the total cost of ownership across structures to determine which path suits your goals.

💡 Pro Tip: Don’t Use a Trading Company

Always use a clean SPV (not a trading business) when applying for limited company mortgages. Most lenders will refuse applications tied to businesses involved in other activities—even if property is a side investment.

📈 Market Trends in 2025

More lenders are now competing for limited company borrowers, with better rates and more flexible stress testing.

Portfolio landlords are increasingly refinancing properties into SPVs to free up personal income capacity and simplify lending structures.

📞 Want Help Navigating Today’s Market?

Book a free strategy call with one of our mortgage specialists.

We’ll help you find the smartest way forward—whatever rates do next.