Limited company buy to let mortgage articles of association new company is a specialist mortgage product designed for landlords who purchase investment properties through a newly formed limited company. This structure is increasingly popular among UK property investors in 2025 due to favourable tax treatment, especially in light of Section 24 restrictions on mortgage interest relief for individual landlords. By setting up a Special Purpose Vehicle (SPV) limited company, landlords can potentially offset mortgage interest against rental income, improving overall profitability.
Buy-to-let lending through a limited company also offers flexibility for portfolio landlords and can simplify inheritance planning. However, lenders require specific documentation, including tailored articles of association, to ensure the company is structured solely for property letting. As BTL mortgage rates remain competitive and regulatory scrutiny increases, understanding how this mortgage type works is essential for both new and experienced landlords seeking investment property finance or a landlord mortgage solution.
Quick Facts
– Interest rates: 4.5% to 6.5% (as of early 2025)
– Minimum deposit: 25%
– Rental coverage: 125% to 145% of monthly mortgage payment
– Maximum LTV: 75%
– Arrangement fees: Typically 1% to 2% of the loan amount
– Application timeline: 4 to 8 weeks from submission to completion
Limited company buy to let mortgages generally require a larger deposit and higher rental income coverage than residential mortgages. Lenders assess affordability based on projected rental income rather than personal earnings, and the company must be set up with appropriate articles of association to qualify.
How This Mortgage Works
A limited company buy to let mortgage articles of association new company is structured for landlords purchasing or remortgaging a rental property via a newly formed limited company, usually registered as an SPV with Companies House. The articles of association must specify that the company’s business activity is property letting, typically under SIC code 68209 (Other letting and operating of own or leased real estate).
Lenders offer various mortgage types under this structure, including fixed-rate, variable, and tracker products. Fixed-rate mortgages are popular for budgeting, while tracker products may appeal to those expecting base rate reductions. These mortgages are interest-only in many cases, allowing landlords to maximise cash flow.
This mortgage suits first-time landlords setting up a company for tax efficiency, as well as experienced portfolio landlords looking to consolidate or expand their holdings. In 2025, lender appetite for limited company BTL lending remains strong, particularly for SPVs with clean credit and strong rental yields. Compared to residential mortgages, these products are assessed on property income rather than personal affordability, although directors’ backgrounds are still scrutinised.
Eligibility and Criteria
To qualify for a limited company buy to let mortgage articles of association new company, applicants must meet both company and individual criteria. Lenders typically require:
– A newly formed limited company registered in England, Wales, or Scotland
– SIC code 68209 or similar, indicating property letting as the sole business activity
– Bespoke articles of association aligned with buy-to-let activity (standard templates are often rejected)
While personal income is not the primary factor, some lenders prefer directors to have a minimum income of £25,000 to £30,000, especially for non-portfolio landlords. However, others focus solely on rental income and the company’s structure.
Rental income must meet a stress-tested coverage ratio, usually between 125% and 145% of the mortgage payment, calculated at a notional interest rate of 5.5% to 6.5%. This ensures affordability even if interest rates rise.
Property type restrictions apply. Most lenders favour standard construction buy-to-let properties. Flats above commercial premises, HMOs, and holiday lets may require specialist lenders or higher deposits.
Credit score expectations vary, but directors should ideally have no recent CCJs, defaults, or missed payments. Some lenders allow minor credit issues, but this may affect the interest rate or available LTV.
Age limits typically range from 21 to 85 at the end of the mortgage term. Employment status is less critical than for residential mortgages, but lenders may request proof of income or tax returns.
Portfolio landlords (those with four or more mortgaged properties) face additional scrutiny. Lenders may require a full portfolio schedule, business plan, and evidence of rental income across all properties (Read our guide to portfolio landlord mortgages).
Applications made in a personal name are assessed differently and are subject to Section 24 tax restrictions. Limited company applications avoid this but must comply with right-to-rent checks, licensing rules, and local authority regulations.
Costs and Affordability
Costs for a limited company buy to let mortgage include:
– Arrangement fees: 1% to 2% of the loan, often added to the mortgage
– Valuation fees: £250 to £1,000 depending on property value
– Legal fees: £800 to £1,500, higher for limited company structures
– Broker fees: £500 to £1,000, depending on complexity
Interest rates for limited company BTL mortgages are typically 0.5% to 1% higher than personal name equivalents, reflecting the perceived risk and administrative complexity.
Affordability is based on rental income, which must exceed mortgage payments by 125% to 145%, stress-tested at higher interest rates. For example, a £1,000 monthly mortgage payment may require £1,250 to £1,450 in monthly rent.
Taxation is a key driver. Limited companies can offset mortgage interest against rental income, reducing corporation tax liability. However, profits withdrawn as dividends may incur personal tax. Section 24 does not apply to limited companies, making this structure more attractive for higher-rate taxpayers.
Landlord insurance and buildings insurance are mandatory, and some lenders require rent guarantee cover. Stress testing at higher rates ensures the investment remains viable even if interest rates rise.
The Application Process
Applying for a limited company buy to let mortgage involves several steps:
1. Set up a limited company (SPV) with appropriate SIC code and bespoke articles of association
2. Research lenders or work with a specialist mortgage broker
3. Obtain a Decision in Principle (DIP) based on rental income and company structure
4. Submit a full mortgage application with supporting documents:
– Company incorporation certificate
– Articles of association
– Director ID and proof of address
– Property details and rental valuation
– Business bank account details (if available)
5. Property valuation arranged by the lender
6. Legal process begins, including company checks and director guarantees
7. Mortgage offer issued, followed by completion
The process typically takes 4 to 8 weeks. Working with a broker can streamline the application, especially when navigating lender-specific requirements or structuring the company correctly.
Common reasons for rejection include unsuitable articles of association, insufficient rental income, or poor credit history. Ensuring the company is correctly set up and the property meets lender criteria is crucial.
Benefits, Risks and Alternatives
The key benefits of a limited company buy to let mortgage articles of association new company include:
– Full tax relief on mortgage interest
– Lower corporation tax rates on rental profits
– Easier transfer of ownership via shares
– Separation of personal and business finances
However, risks include:
– Higher interest rates and fees
– More complex legal and accounting requirements
– Exposure to void periods or rental arrears
– Regulatory changes affecting limited company landlords
Alternative finance options include bridging loans for short-term purchases, commercial mortgages for mixed-use or larger properties, and development finance for refurbishment or new builds.
For existing landlords, remortgaging into a limited company may trigger capital gains tax and stamp duty. Product transfers within the same lender may be more cost-effective in the short term (Read our guide to remortgaging a buy-to-let property).
Frequently Asked Questions
What deposit do I need for a limited company buy to let mortgage?
Most lenders require a minimum deposit of 25% for limited company buy-to-let mortgages. Some may request 30% or more for specialist properties or first-time landlords. A higher deposit can secure better interest rates and improve affordability calculations.
Can I get a limited company buy to let mortgage articles of association new company through a limited company?
Yes, you can apply for a buy-to-let mortgage through a newly formed limited company. The company must be an SPV with appropriate SIC codes and tailored articles of association stating its purpose is property letting. Lenders will assess both the company and its directors.
What rental coverage do lenders require?
Lenders typically require rental income to cover 125% to 145% of the monthly mortgage payment, stress-tested at an interest rate of 5.5% to 6.5%. This ensures the property remains affordable even if interest rates rise. Higher-rate taxpayers may face stricter stress tests.
How does Section 24 tax affect buy-to-let mortgages?
Section 24 restricts individual landlords from deducting mortgage interest from rental income, increasing their tax liability. However, limited companies are exempt from Section 24, allowing full interest deduction as a business expense. This is a major reason landlords choose limited company structures.
Can I live in a property with a limited company buy to let mortgage?
No, you cannot live in a property financed with a limited company buy-to-let mortgage. These mortgages are strictly for investment purposes. Living in the property would breach the mortgage terms and could lead to repossession or legal action.
What credit score do I need for a buy-to-let mortgage?
While there is no fixed score, lenders prefer directors with good credit histories—typically a score above 650. Minor issues may be acceptable, but serious credit problems can limit your options or result in higher interest rates. A clean credit file improves approval chances.
Key Takeaways
Limited company buy to let mortgage articles of association new company is a strategic option for UK landlords aiming to maximise tax efficiency and long-term investment returns. In 2025, lenders continue to support SPV structures, provided the company has the correct SIC code and bespoke articles of association. While interest rates and fees may be higher, the tax benefits and flexibility often outweigh