The growing popularity of setting up a limited company for buy-to-let investments has reshaped the property finance landscape. With advantages such as increased borrowing potential and tax efficiencies, limited companies—often structured as Special Purpose Vehicles (SPVs)—are now the go-to for many property investors.
Choosing the right mortgage lender is crucial to maximising these benefits. In this guide, we’ll explore the top five buy-to-let mortgage lenders for limited companies, highlighting their unique offerings, why they stand out, and how they cater to SPVs.
Why Lenders Prefer Limited Companies
Over recent years, lenders have tailored products specifically for limited companies. These products offer:
Favourable Affordability Calculations: Lenders assess rental income rather than personal income, often leading to higher borrowing amounts.
Full Mortgage Interest Deduction: Unlike individual landlords, SPVs can deduct 100% of mortgage interest as a business expense.
Streamlined Lending Criteria: SPVs with appropriate SIC codes (such as 68209 for letting properties) are easier to underwrite.
Understanding the Top Lenders
1. Aldermore
Aldermore is a standout lender for portfolio landlords and limited companies, offering bespoke solutions for complex cases.
- Flexibility: No minimum income requirement for experienced landlords.
- Portfolio Support: Tailored options for SPVs with multiple properties.
- Competitive Rates: Fixed-rate and variable products with transparent terms.
Why Choose Aldermore?
Aldermore is ideal for landlords who own multiple properties and need a lender that understands portfolio management. Their expertise in dealing with SPVs ensures a seamless borrowing experience.
Example:
A landlord with four properties uses Aldermore to refinance an SPV portfolio, benefiting from lower rates and additional borrowing potential for future investments or auction property purchases.
2. The Mortgage Works (TMW)
As part of Nationwide, TMW brings the reliability and stability of a high-street brand to the niche of limited company mortgages.
Key Features:
- LTV Ratios up to 80%: Suitable for investors looking to leverage their investment.
- SPV Focus: Simplified criteria for companies with the correct SIC codes.
- Range of Terms: Two, three, and five-year fixed rates available.
Why Choose TMW?
TMW is perfect for investors seeking higher LTV ratios and predictable repayments. Their fixed-rate products provide long-term stability, ideal for planning growth.
3. LendInvest
LendInvest is a fintech-focused lender, making it a popular choice for tech-savvy landlords seeking quick approvals and efficient processes.
Key Features:
- Streamlined Applications: Technology-driven underwriting for faster decisions.
- Tailored Criteria: Products designed for professional landlords and developers.
- Competitive Rates: Lower rates for SPVs with strong rental coverage.
Why Choose LendInvest?
If speed and efficiency are priorities, LendInvest stands out. Their online platform simplifies the mortgage process, ideal for investors managing multiple properties.
Example:
A property developer uses LendInvest to secure a buy-to-let mortgage within two weeks, enabling a fast-track purchase of a high-potential property.
4. Paragon Bank
Paragon Bank caters to landlords with niche needs, such as HMOs or multi-unit properties, offering a robust range of products for SPVs.
Key Features:
- Specialist Lending: Supports complex cases, including multi-unit freehold blocks.
- Interest-Only Options: Helps investors maximise cash flow.
- HMO Expertise: Tailored solutions for houses in multiple occupation.
Why Choose Paragon Bank?
Paragon is a leader in lending for HMOs and other non-standard properties. If your SPV manages unique property types, Paragon’s flexibility can make a difference.
Example:
A landlord with a portfolio of HMOs refinances with Paragon, accessing better rates and freeing up equity to fund additional purchases.
5. Molo Finance
Molo Finance is a digital-first lender disrupting the traditional mortgage market with an entirely online application process.
Key Features:
- Fully Online: Quick applications with minimal paperwork.
- Transparent Rates: Regularly competitive rates for SPVs.
- Efficient Approvals: Decisions made in days, not weeks.
Why Choose Molo Finance?
Molo’s modern approach is perfect for tech-oriented investors who value speed and convenience. Their online platform is intuitive, making them an excellent choice for first-time SPV landlords.
