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Should I use a company or an individual to buy property?


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I asked my mortgage broker for advice. If I buy my first property with a company, the interest rate on the mortgage is about 4.5%. If I buy it personally, the interest rate is about 2.8

In the long run, I would buy more than five properties. I understand the tax benefits of buying a property with a company, but if the interest rates are that far apart, the tax savings from buy with a company are less than enough to cover the interest costs

So my question is:

If I buy my first property as an individual so that the lenders know that I have experience investing in property, will my second or third property be bought as a company, which will help reduce the mortgage interest rate I would get if I bought the property as a company?

 

 

 

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Without knowing your exact circumstances I cannot say for sure...but 4.5% is quite high for a LTD Co. mortgage. This is likely to be down to the fact you are a first time landlord, as there are much better rates available in the market for LTD Co.

You are correct that once you already own a BTL/have lettings experience, this can open the market up somewhat for you and alternative lenders should be available.

I hope this helpful, but please do reach out if you would like a 2nd opinion, always happy to check you are making the right move.

Best regards

Nathan Cole

 

 

Nathan Cole CII (MP)

Mortgage Consultant at Private Finance

Office: +44 (0)1743 211 855

Email: nathan.cole@privatefinance.co.uk

Website: www.privatefinance.co.uk

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