What are SPV mortgages?
Updated 23rd September 2020
What are SPV mortgages?
An SPV (or Special Purpose Vehicle) is a separate company and allows investors to apply for a mortgage as a limited company instead of in personal names. There are certain Companies House SIC codes which must be used when setting up the company, these are listed below. When setting up the company its vital to get expert tax advice with regards to the best way to structure the SPV. More information can be found here.
68100 – Buying & sell own real estate
68201 – Renting & operating of housing association real estate
68209 – Other letting & operating of own or leased real estate
68320 – Management of real estate on a fee or contract basis
What are lender requirements for a SPV limited company buy to let mortgage.
As with a normal buy to let mortgage each lender has different requirements, and your mortgage expert will be able to see which lender is best suited for your circumstances.
There will be several questions from the lender mainly focusing around the number of shareholders, share splits and company structure. If the SPV has just been set up the lender will ask for personal guarantees from the directors.
While affordability will be based on rental coverage calculations, any credit scoring/profiling will be based on the individuals rather than the company.
Will the property type affect my SPV mortgage?
Some properties are perceived as higher risk and are harder to get mortgages on. The reason behind this is the potential need for a lender to resell the security.
There is a wide variety of lenders all with vastly different criteria around what they will or will not accept. Call our experts 0300 124 5655 or make an enquiry for the latest information
Such properties are:
- High rise flats or tower blocks
- Flats with cladding
- Flats above commercial properties
- Timber framed properties
- Corrugated iron
- Prefabricated concrete
- Thatched roofs
- Large acreage of the property
- Properties close to certain commercial businesses
How much deposit will I need for my SPV limited company buy to let mortgage?
The minimum deposit is 15%, however there are very few lenders working in this area with rates therefore being higher and criteria stricter. If you are a first-time landlord or have some previous bad credit, then a higher deposit will be needed. To truly understand how much you will need, speak to one of our experts and they will give you a rundown of everything involved.
If you would like to discuss SPV limited company mortgages with an advisor, then either complete our quick enquiry form on our homepage or call us on 0300 124 5655
How do I get a SPV limited company buy to let mortgage?
If you have previous landlord experience this will give you more options. There are options available for first time landlords but its more restricted.
Each lender has a different set of criteria and will want to know the following.
- Number of directors for the SPV
- How many properties each director owns
- How the shares are split within the SPV
- Credit history of all directors
- Property type
- Construction type
- Property location
Do high street lenders accept SPV limited company buy to let mortgages?
Most high street lenders don’t have product ranges for SPV limited company buy to let mortgages. The reason is, they are more complicated or specialist and the high street lenders prefer to concentrate on the mortgages they know.
The specialist lenders are the ones who provide most of the mortgages for SPV limited company buy to let applications.
The interest rates for SPV buy to let mortgages tend to be higher than normal buy to let mortgages. The key is knowing which lenders will accept your application and getting the best rate for your circumstances.
Speak to a SPV mortgage advisor.
Our mortgage experts will look at each case before deciding which lender is right for you and your individual circumstances. All the mortgage brokers we work with are whole of market and offer unbiased advice. They will have access to all the specialist lenders to really enhance your chances of achieving the mortgage you need.
The expert brokers we work with have experience in dealing with all aspects of SPV limited company buy to let mortgages, and importantly using the whole of the market to access the very best deals available.