SPV Mortgage

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Author: Elliott Culley - Director & Mortgage Adviser of Switch Mortgage Finance

What is a SPV Mortgage?

A Special Purpose Vehicle (SPV) mortgage allows you to purchase a buy to let property in the name of a limited company rather than in your personal name. SPV is another name for a limited company and only certain lenders offer products SPVs.

Generally speaking rates on SPV’s are slightly higher than a buy to mortgage in your personal name, and they can come with higher lender fees too. However SPV mortgages provide an opportunity to borrow more money on your property than if you were to purchase a buy to let in your personal name.

SPV Buy to Let

Since the changes in Buy to Let tax rules, the SPV mortgage route has become popular with landlords for purchasing properties. As a result, more lenders have entered the market, making it more competitive.

To purchase through a limited company, you need to ensure you set up a limited company at Companies House with a specific SIC code related to property investment. Otherwise, you will find lenders will not be able to offer you their mortgage products.

For buy-to-let lending you should use one or more of the following SIC codes:

68100 – BUYING AND SELLING OF OWN REAL ESTATE
68209 – OTHER LETTING AND OPERATING OF OWN OR LEASED REAL ESTATE
68320 – MANAGEMENT OF REAL ESTATE
68201 – RENTING AND OPERATING OF HOUSING ASSOCIATION REAL ESTATE 

Is it Easy to get a SPV Mortgage?

SPV mortgages have become a competitive market and it is highly probable you will be able to find a lender willing to offer you a mortgage. However, they’re not as common as personal buy-to-let mortgages and are typically only available through specialist lenders.

Speak to an Expert!

elliott-culley-mortgage-adviser- director-of-switch-mortgage

Contact us today for expert advice and guidance on your unique mortgage and property needs. We will work with you on a one-on-one to basis to help you find the right solution for your needs.  

With our experience you can rest assured that you are in good hands when it comes to securing the financing you need for your property.

Why Would You Purchase a Buy to Let in an SPV Instead of your Personal Name?

SPV’s became popular due to the tax implications for holding buy to let properties in your personal name. If you are a higher rate taxpayer you may find it is more tax efficient to hold your property in a limited company, but we suggest you speak with a specialist tax adviser.

Higher rate taxpayers can also benefit from lower mortgage lender rental stress tests is they purchase a property through a limited company.

What are the Disadvantages of a SPV Mortgage?

There are more lenders in the personal buy to let mortgage market and rates are a little bit lower. If you are a basic rate taxpayer it could be more expensive, so it really does depend on what your goals and objectives are.

How Many Buy to Let Mortgages can an SPV Have?

There is no legal limit on how many mortgages any one company can hold. However, you can be restricted to an overall borrowing limit with a specific lender, or if you are a portfolio landlord, you may find some lenders will not lend to you at all. 

How do you calculate the stress test for buy to let mortgages. Switch Mortgage Finance

Do SPV’s Pay Stamp Duty on Buy to Let?

Yes, you will still have to pay stamp duty if you purchase through a limited company.

Mortgages for SPV Holiday Let

Purchasing a holiday let mortgage through an SPV is possible with a selection of mortgage lenders. Affordabilty is assessed via the rental income you will receive. Some lenders will want to know the high, medium and low season rental figures before basing their decision. Holiday lets are only available on properties in coastal areas or large cities.

Can You Purchase a SPV Mortgage as a First Time Landlord?

Yes there are mortgage lenders who offer SPV mortgages to first time landlords. Some lenders may want you to earn a minimum income or may restrict the loan to value. So you want to ensure you find a lender that suits your specific circumstances.

How Much Deposit Do You Need?

Most lenders will require a 25% deposit, however there are some lenders that will offer a 20% deposit.

Why Choose a Mortgage Broker?

When purchasing a limited company buy to let mortgage, you’ll want access to the best products on the market. For this reason, we’d highly recommend having an advisor on board. Our specialists can find you a suitable lender and help you secure a mortgage in no time at all.