Investing in buy-to-let properties through a limited company (SPV) has become an increasingly popular strategy among landlords. The shift is largely driven by tax efficiencies, improved borrowing potential, and limited liability protection.
However, one key difference between personal and limited company buy-to-let mortgages is interest rates—which tend to be higher for corporate borrowers. In this guide, we’ll explore:
- How limited company BTL rates compare to personal buy-to-let mortgages
- What factors affect mortgage pricing
- How to secure the best interest rates
- Case studies of landlords optimising their borrowing strategy
How Do Limited Company Buy-to-Let Interest Rates Compare?
Why Are Limited Company BTL Rates Higher?
Current Interest Rate Trends (as of 2024)
- Limited Company BTL Rates: 5.0% – 7.5% (fixed for 2 to 5 years)
- Personal BTL Rates: 4.5% – 6.5%
Example: If a landlord takes out a 75% LTV mortgage on a £300,000 property via a limited company, the interest rate may be around 5.5%, while a personal BTL mortgage could be 4.75%. The difference can add £150-£250 per month in repayments.
Factors That Affect Limited Company BTL Interest Rates
Several factors influence how much you’ll pay on a mortgage for an SPV buy-to-let:
1. Loan-to-Value Ratio (LTV)
- Lower LTVs (e.g. 60% or less) attract better rates.
- Higher LTVs (75%-80%) come with increased risk, leading to higher interest rates.
2. Property Type
- HMOs & Multi-Unit Freehold Blocks (MUFBs) attract higher rates due to their complexity.
- Single-unit properties often have more competitive pricing.
3. Lender Selection
- High street banks (e.g., HSBC, Barclays) offer lower rates but have strict SPV criteria.
- Specialist lenders (e.g., LendInvest, Paragon, Aldermore) are more flexible but charge higher rates.
4. Interest Cover Ratio (ICR)
- Lenders stress-test rental income against potential rate increases. Use our buy-to-let calculator to assess your estimated borrowing based on rental income and ICR.
- SPV mortgages often require higher rental coverage than personal BTL loans.
Top Lenders Offering Limited Company BTL Mortgages
Here are some of the top lenders in the UK offering competitive SPV buy-to-let mortgage rates:
| Lender | Typical Rates (2024) | LTV Options | Best For |
| HSBC | From 5.0% | Up to 75% | Portfolio landlords |
| The Mortgage Works (TMW) | From 5.25% | Up to 75% | SPVs with clean credit |
| Aldermore | From 5.5% | Up to 80% | HMOs & complex cases |
| Paragon Bank | From 5.75% | Up to 75% | Multi-unit properties |
| LendInvest | From 5.25% | Up to 75% | Fast approvals |
Tip: Some lenders offer discounts for existing customers or lower rates for large portfolios—always check!
How to Get the Best Limited Company BTL Rates?
1. Improve Your Credit Profile:
A strong business and personal credit score can lead to lower rates.
2. Keep Your LTV Low:
If possible, increase your deposit to keep borrowing below 70% LTV.
3. Choose the Right SIC Code:
Lenders prefer SPVs registered under 68209 (letting & operating real estate).
4. Use a Specialist Mortgage Broker:
A broker can access exclusive deals and negotiate lower rates.
Case Study: Lowering Costs on an SPV BTL Mortgage
Scenario:
John, an experienced landlord, wants to purchase a £250,000 buy-to-let property through his limited company.
Mortgage Choice:
- Option 1: 75% LTV mortgage at 5.75% interest (£897/month).
- Option 2: 65% LTV mortgage at 5.25% interest (£715/month).
Decision:
John increases his deposit to lower the LTV to 65%, securing a lower rate and saving £182 per month. Over five years, this reduces costs by £10,920.
Lesson: Lower LTV = lower rates = increased long-term profits.
Final Thoughts
Despite slightly higher rates, limited company buy-to-let mortgages offer:
✔ Full tax relief on mortgage interest
✔ Potential for higher borrowing limits
✔ Better long-term wealth management
While not always cheaper upfront, the tax advantages and portfolio scalability make SPV mortgages a compelling choice for landlords.
Need help securing the best-limited company buy-to-let mortgage? Get expert advice today!
Contact us at Auction Finance
FAQs
Ans: Yes, SPVs set up solely for property investment do not require trading history, making them ideal for new companies.
Ans: Typically, yes—but the tax benefits often offset the additional costs.
Ans: Yes, but this involves selling the property to the company, triggering SDLT and potential CGT liabilities.
Ans: Expect arrangement fees (1-2%), valuation fees, and legal costs when securing a limited company mortgage.
