Commercial Buy to Let Mortgage

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Commercial Buy to Let Mortgage 

Clifton private finance

We specialise in sourcing commercial buy to let mortgages in the UK

As a specialist mortgage broker, we provide high quality commercial mortgage solutions for our clients.
  • Market leading rates from 0.44% pm
  • Up to 80% Loan To Value (100% with additional security)
  • Commercial & semi-commercial mortgages from £100,000 to £100 Million
  • Portfolio deals
  • Owner occupied commercial mortgage options
  • Short term commercial finance solutions from 3 to 24 monthsFinance options for England, Scotland, Wales and Northern Ireland (We can also source finance for projects in Ireland)
  • Terms  from 3 months
  • Interest roll up options
  • Same day agreement in principle
  • Products with no early repayment charges
  • We can accept applications from individuals (first-time landlords accepted), limited companies, SPV's and offshore structuresWe are independent and have strong relationships with many commercial lenders as well as private banks, wealth managers and specialist lenders that are not available on the high street
  • Finance for residential & commercial sectors, including retail outlets, offices, warehouses, industrial units, factories, HMOsnursing homes and care homes, investment properties, development projects and buy-to-let property (btl portfolios and limited companies welcome)
We pride ourselves on providing excellent service responsive to your needs.
Call us on 0203 900 4322 to discuss your requirements.

Property Finance Deals

Bridging Loan with Multiple Drawdowns Secured for 18-Bed HMO Conversion
Bridging Loan with Multiple Drawdowns Secured for 18-Bed HMO Conversion
Capital Raised
HMO Mortgage for LLP to Secure Buy to Let in Swansea
HMO Mortgage for LLP to Secure Buy to Let in Swansea
Capital Raised
BTL Mortgage Based on Overseas Income for Expat in Taiwan
BTL Mortgage Based on Overseas Income for Expat in Taiwan
Capital Raised
Buy To Let Mortgage With No Income For Penthouse In Leeds
Buy To Let Mortgage With No Income For Penthouse In Leeds
Capital Raised
Case Study: Securing £1.25m Buy to Let Mortgage for Development Finance Exit
£1.25m Buy To Let Mortgage Secured for Development Finance Exit
Capital Raised
Large Property Portfolio Remortgage | 18 London BTL Properties Refinanced
London Landlord Remortgages 18 Properties on Same Day
Capital Raised

More Opportunities »

Commercial Buy To Let Mortgage Service

What is a Commercial Buy To Let Mortgage?

A commercial buy to let mortgage allows you to purchase a non-residential property for the purposes of renting it out to commercial tenants. This could include;

As an investor, you are essentially buying the property as a commercial landlord with the intention of generating rental income from businesses operating on the premises.

Commercial buy to let mortgages function similarly to standard buy to let mortgages for residential properties, but with some key differences:

At Clifton Private Finance, our expert mortgage brokers can guide you through the intricacies of commercial investment property financing.

Commercial Mortgage Service »

Benefits of a Limited Company for Commercial Buy-to-Let Mortgage

While some property investors operate as individuals, there are several advantages to setting up a limited company to manage your commercial buy-to-let portfolio:

However, there are some potential downsides to consider as well:

Overall, incorporating provides significant tax advantages and operational benefits for commercial property investors, especially those with larger portfolios. Working with expert brokers, such as us, at Clifton Private Finance, can help guide you through the process.

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Commercial Mortgages for Buy-to-Let Businesses

Mortgages for buy-to-let businesses can be more restrictive than those for individual landlords in some cases. One common requirement is that the BTL Company must be established with accounts for multiple years before being accepted for certain mortgage products.

However, this is not universally the case, and with assistance from an experienced broker like Clifton Private Finance, you should be able to find a suitable commercial buy-to-let mortgage even if your company is newly formed - though you may face more restrictive terms initially.

Once a buy-to-let business has been properly established with a strong financial track record demonstrating lower risk, the range of competitive mortgage options increases significantly.

Commercial Buy To Let Mortgage Case Studies

Large Invoice Finance Facility Secured Despite Overseas Debtors
Large Invoice Finance Facility Secured Despite Overseas Debtors
Capital Raised
Fleet of Vans Refinanced to Release £160k for Business Growth
Fleet of Vans Refinanced to Release £160k for Business Growth
Capital Raised
Fast Asset Finance for Two Tractors at Low Rate | Case Study
Fast Asset Finance for Two Tractors at Low Rate
Capital Raised
Management Buy Out Finance For Funeral Director
£750k Management Buy Out Finance For Funeral Director
Capital Raised
Asset Based Lending Facility for Steel Business | Case Study
Asset Based Lending Facility for Steel Business Management Buyout
Capital Raised
Anaerobic Digester Plant Refinance For Business Growth
£5.2m Anaerobic Digester Plant Refinance For Business Growth
Capital Raised

Buy-to-Let Stress Testing for Commercial Mortgages

As part of their risk assessment, commercial mortgage lenders will conduct a buy-to-let stress test on your application. This financial analysis determines whether you can still afford the mortgage repayments if circumstances become less favourable in the future.

The lender then simulates a scenario with higher interest rates, usually around 5-7% above their current standard variable rate. This artificially inflated rate is used to calculate whether your rental income would still be sufficient to cover the increased mortgage payments.

The assessment takes into account not just the mortgage costs, but also other associated expenses like maintenance, management fees, building insurance and more. If your projected rental income can adequately cover these higher simulated outgoings, you pass the buy-to-let stress test.

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Converting From Personal Buy to Let Property into a Commercial Mortgage

Converting a personal buy-to-let property into a commercial buy-to-let business can involve significant costs and complexities. Here are the key considerations:

Transferring Properties to a Company

To transfer existing buy-to-let properties into a company structure, you effectively need to sell the properties to the company. This will incur costs such as:

Tax Implications

One potential benefit of a company structure is that mortgage interest is treated as a business expense, reducing corporation tax liability. However, this must be weighed against other taxes like Stamp Duty and Capital Gains Tax incurred during the transfer. It’s crucial to carefully evaluate the upfront costs against potential long-term tax savings.

Seeking professional financial and legal advice is highly recommended before making this transition

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Tax Considerations for Commercial Buy to Let Properties

Here are the key tax considerations for commercial buy-to-let properties held in a limited company structure in the UK:

Corporation Tax vs Income Tax

When commercial properties are held in a limited company, the rental income is subject to corporation tax at 19%, rather than being taxed at the individual's personal income tax rates (20%, 40% or 45%). This can provide significant tax savings for higher-rate taxpayers.

Mortgage Interest Deductibility

For commercial buy-to-lets held in a company, mortgage interest payments can be deducted as a business expense before calculating taxable profits. This is not allowed for personal buy-to-let properties.

Dividend Tax on Withdrawals

When withdrawing profits from the company, shareholders pay dividend tax at 8.75% (basic rate) or 33.75% (higher rate) on the dividends received, in addition to corporation tax paid by the company.

Stamp Duty Land Tax

Companies pay a higher rate of Stamp Duty Land Tax (SDLT) when purchasing commercial properties, with a 3% surcharge on top of the standard rates in England and Northern Ireland. This increases the upfront costs.

Capital Gains Tax

Unlike personal ownership, limited companies are generally exempt from capital gains tax when selling properties. Instead, any gains are subject to corporation tax when withdrawn from the company.

VAT Implications

For commercial properties, landlords can opt to charge VAT on rents, allowing them to reclaim VAT paid on expenses. Residential rentals are VAT-exempt. It's crucial to carefully evaluate the potential tax savings against the higher upfront costs and complexities of operating through a limited company structure, while considering your specific circumstances. Professional tax advice is highly recommended.

While there are some cases where the capital gains tax liability would have been lower, the corporate structure tends to provide an advantage in most scenarios.

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Commercial Buy to Let Mortgage Calculator 

For a better initial understanding of what you'll pay for a commercial buy to let mortgage, use our commercial mortgage calculator.

Commercial Mortgage Calculator


Commercial Mortgage Service »

Additional Finance Options for Commercial Buy to Lets

When considering financing for your buy-to-let business, it's common to focus solely on the mortgage. However, you may want to look at your business more holistically, improving cash flow and operational efficiency.

A buy-to-let business, like any business, requires sufficient working capital, funds for expenses like contractors, utilities, administrative costs and staff salaries. There are many additional finance options available:

Commercial Buy To Let Mortgages with Clifton Private Finance

At Clifton Private Finance, we have a dedicated team of property finance experts ready to assist you with all aspects of your buy-to-let business. As a specialist mortgage broker, we have strong relationships with all the major UK lenders as well as access to a wide range of niche mortgage products and business finance solutions.

Speak to us today to discover how we can help you get your buy-to-let business off the ground and operating optimally. We provide:

To see what we can do for you, call us at 0203 900 4322 or book a free consultation below.

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Can you buy a commercial property with a buy-to-let mortgage?

Yes, commercial buy-to-let mortgages are specifically designed for purchasing non-residential properties to rent out to business tenants like offices, retail units, industrial properties and more.

How much deposit do you need for a commercial buy-to-let mortgage?

Most commercial buy-to-let lenders require a minimum deposit of 25-30% of the property's value, though this can vary based on your personal circumstances and mortgage amount.

How much can I borrow for a commercial buy-to-let mortgage?

This depends on factors like the property value, your income and assets, existing debts and creditworthiness. Generally, you may be able to borrow up to 70-75% of the commercial property's market value with a buy-to-let mortgage.

How much is commercial stamp duty?

When purchasing a commercial property over £150,000, stamp duty rates start at 2% and rise incrementally to 5% for properties over £250,000. There are different rates for lease premiums and non-residential lease renewals.

How long does it take to get a commercial buy-to-let mortgage?

From initial inquiry to mortgage offer, the application process typically takes 4-8 weeks when going through an experienced broker like Clifton Private Finance. More complex cases may take longer.

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