Specialist mortgage frequently asked questions

A Ltd Co BTL is a buy to let mortgage where the borrower is a UK limited company (typically a Special Purpose Vehicle whose only activity is holding rental property). It is the standard structure for higher-rate-taxpayer landlords because mortgage interest is fully deductible inside the company, whereas Section 24 restricts personal-name interest relief to a 20% tax credit. Whether Ltd Co is right for you is a tax question - check with your accountant - but the financing is now mainstream, with rates typically 0.2-0.4% above personal-name BTL equivalents.

From 1 October 2017, the Prudential Regulation Authority defined a portfolio landlord as one with four or more mortgaged buy to let properties (in any combination of personal and Ltd Co names). Lenders must underwrite the whole portfolio when assessing a new application, not just the property being financed. In practice that means providing a portfolio schedule, business plan, asset and liability statement and cash-flow forecast. The portfolio assessment can either help or hinder depending on overall portfolio LTV - well-leveraged portfolios get tougher treatment.

Interest Coverage Ratio (ICR) is the lender's affordability test for rental income. The standard ICR is 125% of the mortgage interest, stressed at a notional rate (typically 5.5-7% on personal-name BTL, 5-5.5% on Ltd Co). Higher-rate taxpayers borrowing personally face a higher 145% ICR. The notional stress rate is reduced on five-year-plus fixed rates (often to the pay rate plus 1-2%), which is why most BTL borrowers now fix for five years - it materially increases borrowing capacity.

Yes, with a sub-group of lenders. Top-slicing means using surplus personal income (salary, self-employed profit, other rental income) to bridge the gap when the rental income alone fails the lender's ICR. Common top-slicing lenders include Precise, Foundation, Vida and several building societies (Cambridge, Hodge, Family). Useful for high-value BTL purchases in low-yield areas (central London) where the rent alone struggles to support the loan.

A semi-commercial mortgage (sometimes called mixed-use) is on a single property combining commercial and residential use - typically a shop with a flat above, an office with a maisonette, or a pub with a manager's flat. The residential element is usually at least 30-40% of the value. A commercial mortgage is on a property that is purely commercial - a shop without residential, a warehouse, an office block. Semi-commercial pricing is typically 0.5-1% keener than fully commercial because the residential element reduces lender risk.

Commercial mortgage ICR is typically 130-150% of mortgage interest stressed at the pay rate plus 1-2%, though specific lenders run their own calculations. Higher ICRs apply on speculative or vacant property; lower ICRs apply on long-let property to strong covenants. Owner-occupied commercial mortgages (where the borrower trades from the property) typically run on EBITDA cover rather than rental ICR.

Yes. Around 15-20 lenders operate expat mortgage products covering BTL, residential and (less commonly) holiday-let. Each has an approved country list. Common acceptances include the EU, EEA, Channel Islands, Australia, New Zealand, Canada, USA, Singapore, Hong Kong and UAE. Sanctioned countries and most of Africa, Latin America and central Asia are typically declined. Lender preferences also vary by employer type (multinational, government, military, contractor) and currency (USD, EUR, AED, HKD and SGD are widely accepted; smaller currencies are not).

Yes, and they are often the right solution for high-loan-size cases on prime UK residential. Coutts, JP Morgan, Citi Private Bank, UBS, Julius Baer, Investec and Hampden all lend to qualifying foreign nationals on UK property. The minimum loan size is typically £1m to £2m. Many private banks expect a balance-sheet relationship (assets under management) in exchange for the keenest pricing, but several (Investec, Hampden, Arbuthnot) write dry mortgages with no AUM ask.

Yes, but the lender pool narrows substantially. Residential mortgages are not available where the property is occupied by a sitting tenant (Rent Act 1977 protected or assured tenancies). Buy to let mortgages can be arranged where the tenancy is a standard AST and the rent supports the lender's ICR. Specialist lenders such as Together, Castle Trust, Norton and certain building societies will lend on properties with regulated tenancies subject to a discount on the property's open-market value.

A buy to let mortgage permits letting on a 6-12 month assured shorthold tenancy. A holiday let mortgage permits short-term letting (days or weeks at a time) on platforms like Airbnb, Vrbo and Sykes. Lenders underwriting holiday lets use a projected seasonal income (typically supported by AirDNA data and a chartered surveyor's letting projection) rather than long-term AST rent. Holiday-let LTVs are typically capped at 75-80% versus 75% on standard BTL, and pricing is usually 0.3-0.5% above BTL equivalents.

Private banks underwrite holistically rather than to a scorecard. They consider the borrower's full balance sheet (liquid investments, other property, business interests), the consistency of income over a longer horizon, and the wider relationship value to the bank. They are more comfortable with interest-only, multi-currency income and complex ownership structures than a high-street equivalent. The trade-off is bespoke pricing rather than published rates, often a higher arrangement fee, and (frequently) an expectation of an AUM relationship.

On mortgages over £1m we charge no upfront broker fee. On smaller mortgages a flat broker fee may apply, disclosed in writing before any application. Lender procuration fees (typically 0.3-0.5% of the loan, paid by the lender to the broker) are disclosed in the suitability letter. We do not charge a percentage of the loan as a fee on regulated mortgages.