Refinancing a buy-to-let portfolio at rate expiry — what the lender re-tests, and what a limited company changes

When a five-year fix ends, the lender does not simply reprice the loan — it re-underwrites the whole facility as if you were applying today. Expect the same three tests as a fresh application: rental cover against a stress rate, not your actual rate; a portfolio landlord assessment if you hold four or more mortgaged buy-to-let properties; and, if the rent alone does not clear the bar, a full re-check of your personal income and outgoings. One exception matters more than most landlords realise: if you are not borrowing a penny more than you owe today, the regulator's own rules say the full affordability re-test does not have to apply.

Key Takeaways

What the lender re-tests when your fix ends

Every UK mortgage lender's buy-to-let underwriting is built on a single 2016 document: the Bank of England's Supervisory Statement SS13/16, addressed to the regulated firms that write these loans. It set out to stop lenders competing away basic affordability discipline in a low-rate market, and — a decade on, rates having moved a long way from where they were in 2016 — it is still the floor every lender builds from.

The rental cover test (ICR)

The regulator expects lenders to test rent against interest using an interest coverage ratio: expected monthly rental income divided by the monthly interest payment, with that interest payment itself calculated on a stressed basis rather than your actual pay rate. The industry-standard minimum threshold sitting on top of that stressed calculation is 125% — so the rent has to clear the stressed interest bill by a quarter, not just cover it.

The stress rate floor

This is the detail that catches people out at renewal: the stress rate is not simply "your rate plus a margin." The PRA requires lenders to look at likely future interest rates over a minimum of five years from the start of the new mortgage — unless the new rate is itself fixed or capped for five years or more (or for the whole remaining term, if shorter). Whatever that forward-looking calculation produces, the lender must still assume a minimum borrower interest rate of 5.5% during those first five years if their own number would otherwise be lower — and separately, must in any case factor in at least a 2 percentage point rise above the rate actually being offered. Where a lender wants to assume rental income will grow to help meet that test, the assumed growth is capped at 2%, in line with the CPI inflation target — it cannot be waved higher to make a marginal deal work.

Worked example, using only the regulator's own figures: say the loan being refinanced is £250,000. At the 5.5% stress floor, the annual interest bill used for the test is £13,750 — £1,145.83 a month. At the 125% ICR minimum, the rent has to reach £1,145.83 × 1.25 = £1,432.29 a month to pass, regardless of what the actual pay rate on the new fix turns out to be. A property renting for £1,300 a month would fail that test even though it comfortably covers the real, unstressed interest cost.

If you hold four or more mortgaged properties

The PRA treats a borrower with four or more distinct mortgaged buy-to-let properties — held together or separately, in aggregate — as a "portfolio landlord," and expects a specialist underwriting approach rather than a single-property affordability check. In practice this means the lender can ask for your experience in the buy-to-let market, your full portfolio and outstanding mortgages, your assets and liabilities, a business plan, and historical and future cash flows across every property you hold — not just the one being refinanced. If your other properties are thinly geared or under-rented, that can drag down an otherwise straightforward remortgage on the property you actually came in about.

The exemption most landlords don't know exists

Paragraph 1.4 of SS13/16 is worth reading carefully, because it cuts against how most people think remortgaging works: the PRA's affordability expectations do not apply to buy-to-let remortgages where there is no additional borrowing beyond the amount currently outstanding. A like-for-like refinance — same balance, new rate, no capital raise — is not automatically subject to the full ICR and stress-rate re-test the regulator mandates for new lending. Lenders remain free to apply their own, tighter standards regardless (and most do run some form of affordability check as a matter of commercial policy), but the regulatory floor itself was deliberately built with an exemption for existing borrowers rolling onto a new deal without raising extra money. If your renewal plan involves pulling out equity — for a deposit on another property, a refurbishment, or anything else — that exemption falls away and you are back to a full re-test.

When personal income has to top up the rent

If the rent alone will not clear the ICR test, lenders can look to your personal income to make up the gap — but that assessment is itself specified. The PRA expects the lender to look at your income net of tax and National Insurance, your existing credit commitments (mortgages across all your properties, not just this one, plus loans, motor finance and credit cards that will continue after the new mortgage starts), your essential living costs, and other committed expenditure such as school fees. This is where a portfolio landlord's other, weaker properties can quietly work against a refinance on a strong one — the lender is looking at the whole credit picture, not the single file in front of it.

There is a separate, higher tier: a "high net worth borrower" — defined as someone with annual net income of at least £300,000, or net assets of at least £3,000,000 — can be assessed on wealth rather than income, giving some lenders more room to manoeuvre. Most landlords refinancing a handful of properties will not meet that bar, but it exists in the standard and is worth knowing about if it applies to you.

Why a rulebook from 2016 still runs the show — and what's about to change

SS13/16 was first published in September 2016, with lenders required to meet the ICR and stress-test expectations by 1 January 2017 and the remaining expectations, including the portfolio landlord test, by 30 September 2017. Everything above has been the operating floor for buy-to-let underwriting ever since. It is not permanent: the Bank of England published a revised version of SS13/16 on 20 January 2026, taking effect from 1 January 2027, tied to the wider Basel 3.1 capital rules being implemented under PS1/26. Landlords refinancing over the next year should expect the substance of the ICR and stress-rate framework to carry on largely as before, but it is not a document to assume is frozen for another decade.

It is also worth knowing what SS13/16 does not cover. It explicitly excludes lending already regulated elsewhere — buy-to-let lending to "related persons" under the FCA's Mortgages and Home Finance sourcebook, and consumer buy-to-let mortgage contracts regulated under the Mortgage Credit Directive Order 2015, which cover the "accidental landlord" who did not buy the property as a business. It also excludes corporate lending — lending written through a firm's corporate or commercial banking division on specialist underwriting, including mixed-purpose, investment or development finance. That carve-out matters for larger portfolios that end up refinanced through a commercial banking relationship rather than a standard buy-to-let mortgage desk; the underwriting conversation there is genuinely different.

The limited company question: what actually changes

This is where the tax story and the mortgage story pull in different directions, and conflating them is the most common mistake.

On underwriting, nothing gets easier. The PRA states plainly that its standards "should form minimum standards, regardless of whether the borrower is an individual or a company." A limited company applying for a buy-to-let mortgage still faces the same ICR test, the same stress-rate floor, and the same portfolio landlord scrutiny if it holds four or more mortgaged properties. Incorporating is not a way to dodge the stress test.

On tax, the position changes completely. Individual landlords have been living with Section 24 since it phased in between 2017-18 and 2020-21: in 2017-18, 75% of mortgage interest was still deductible against rental profit, with the remaining 25% only qualifying for a basic-rate tax credit; by 2020-21, 0% was deductible, and 100% of finance costs only qualify for a tax reduction worth the basic rate (currently 20%) of the lowest of your finance costs, your property profits, or your income above the personal allowance. Crucially, that reduction cannot create a refund and cannot be deducted from rental income to reduce your taxable profit the way it used to — it is a credit against the tax bill, not an expense.

HMRC's own worked examples show why this bites some landlords hard and barely touches others. In one example, a landlord with £52,000 of rental income and £20,000 of mortgage interest as their only income pays exactly the same £2,400 of Income Tax before and after the restriction, because their total income never crosses the higher-rate threshold — HMRC itself estimates this covers around 82% of landlords. In a second example, a landlord with £35,000 of self-employment income plus £18,000 of rental income and £8,000 of mortgage interest ends up paying £8,000 of tax after the restriction versus £6,400 before — an extra £1,600 — because the finance costs that used to reduce taxable income no longer do, pushing total income over the higher-rate threshold (and potentially triggering the High Income Child Benefit Charge on top). The pattern is consistent: Section 24 mainly bites landlords whose finance costs were what was keeping them under a tax-rate threshold, not landlords generally.

Companies sit outside this entirely. HMRC is explicit that companies carrying on a property business "are not affected" by the finance-cost restriction, and separately confirms in its general landlord guidance that both UK-resident and non-UK-resident companies "continue to receive relief for interest and other finance costs in the usual way." A company deducts its mortgage interest against rental profit as a normal business expense, exactly as it did before 2017 — there is no phase-in, no basic-rate cap, no higher-rate exposure on the interest itself. (Note that even for individuals, the restriction only ever applied to a "dwelling-related loan" — borrowing used for a residential letting business; interest on wholly commercial property, or on furnished holiday lets before April 2025, was never caught by it.)

Instead, a company's rental profit sits inside Corporation Tax: 19% on profits of £50,000 or less, 25% on profits above £250,000, with Marginal Relief tapering the rate in between (those thresholds shrink if the company has associated companies or a short accounting period). For a landlord paying higher-rate Income Tax personally, moving future purchases into a company that pays 19-25% Corporation Tax and gets full interest relief can look like a straightforward win on paper — but that comparison only holds for the rental profit itself. Extracting the cash afterwards, as salary or dividends, brings a second layer of personal tax that the individual-ownership route does not have — get it modelled against your own numbers before assuming the company route wins.

What changes in the mortgage and purchase costs

Buy-to-let mortgages for limited companies are a real, separate market — but the SDLT bill on the way in is heavier than for personal ownership, and this is the part often missed when landlords model "company versus personal" only on rental yield and tax relief.

Standard residential SDLT for an individual buying a single property runs 0% up to £125,000, 2% on the next £125,000, 5% up to £925,000, 10% up to £1.5m and 12% above that — and a second residential property already attracts a 5% additional-property surcharge on top of those bands. A company buying residential property faces its own 5% surcharge, layered onto the standard bands in the same way. And where the property costs more than £500,000, certain corporate bodies and "non-natural persons" — companies and partnerships with a corporate partner among them — face SDLT at a flat 17%, unless a relief applies. Relief from that 17% charge is available where the property is used in a property rental business, among other qualifying uses, subject to meeting the relief's conditions — which is the position most incorporated landlords buying to let will be in, but it has to be claimed and evidenced, not assumed.

	Individual (personal name)	Limited company
Mortgage interest tax treatment	Section 24: no deduction from rental profit; basic-rate (20%) tax credit only, capped at the lowest of finance costs / profits / income above the personal allowance	Full deduction against rental profit as a normal expense — companies are not affected by Section 24
Tax on rental profit	Income Tax at your marginal rate (basic/higher/additional)	Corporation Tax: 19% up to £50,000 profit, 25% above £250,000, Marginal Relief between
SDLT on purchase	Standard bands (0–12%) plus 5% surcharge if it's an additional residential property	Standard bands plus 5% company surcharge; 17% flat rate above £500,000 unless rental-business relief applies
Mortgage underwriting standard	PRA's ICR (125%) and stress-rate (5.5% floor, 5-year horizon) apply	Same PRA minimum standards — explicitly "regardless of whether the borrower is an individual or a company"
Portfolio landlord test	Triggered at 4+ mortgaged properties	Same 4+ threshold, tested on the company's holdings

Frequently Asked Questions

Does refinancing through a limited company mean an easier stress test? No. The PRA's underwriting standards are stated to be minimum standards regardless of whether the borrower is an individual or a company — the ICR and stress-rate tests apply the same way.

If I'm not raising extra money, do I still get fully re-underwritten at renewal? The PRA's own rules say the affordability re-test does not have to apply to a buy-to-let remortgage where there is no additional borrowing beyond what is currently outstanding. Individual lenders can still choose to apply their own checks, but the regulatory floor carries an exemption for straightforward, same-balance refinancing.

Am I automatically a "portfolio landlord" if I own four buy-to-let properties? Yes, if all four carry a mortgage — the PRA counts distinct mortgaged buy-to-let properties, held together or separately, in aggregate, at four or more.

Will Section 24 definitely cost me more tax? Not necessarily. HMRC's own figures put the proportion of landlords with no extra tax to pay at around 82%, because the restriction mainly bites once your income crosses a higher-rate threshold. Landlords already close to that threshold, or pushed over it by having finance costs added back into "income" for the calculation, are the ones who feel it.

Is the 2016 rulebook about to change? A revised version of SS13/16 was published in January 2026 and takes effect from January 2027, tied to wider Basel 3.1 implementation. The substance discussed here is the current standard; it is not guaranteed to look identical from 2027.

If your fix is ending and the numbers are close either way — rent against the stress rate, or personal versus company ownership — that comparison is worth doing properly before you commit to either lender or structure. Deplexifi works through both sides of that calculation with landlords and their accountants before a renewal date forces the decision.

Assuming a limited company gets softer underwriting — the PRA's ICR and stress-rate standards apply to companies exactly as they do to individuals; only the tax treatment of the interest changes, not the mortgage test.

Nothing here is regulated financial advice. Deplexifi arranges commercial finance for businesses — this article describes general lending practice and the published position of the sources listed below, not a recommendation for any individual business.