Pauzible's BTL Equity Partnership: What Has Changed
This article explores what has changed in Pauzible's buy-to-let equity partnership model and how the arrangement now works for BTL landlords.
05/10/2026By Sunil Chander · Co-Founder
This article explores what has changed in Pauzible's buy-to-let equity partnership model and how the arrangement now works for BTL landlords.
Pauzible has updated the structure of its buy-to-let equity partnership. Previously, landlords could release up to 10% of a property's value. That has now changed, although the core idea remains the same. Landlords release cash from the equity in a buy-to-let property while retaining full ownership. This update sets out how the product now works.
If you are interested in checking your own potential equity release figures with Pauzible, try our helpful equity partnership calculator.
What has changed
The product is formally structured as an equity partnership loan agreement, offered over a term of two, three or five years. Landlords can release up to £500,000 per property, subject to property value, available equity and underwriting.
Rather than limiting the amount released to 10% of property value, the new structure uses combined loan-to-value (LTV) limits, subject to underwriting. All products are subject to a maximum 85% combined front-end LTV. This is the combination of the existing first-charge mortgage and equity released by Pauzible divided by the value of the property.
The monthly interest cost can now be paid in full monthly, or deferred and compounded and added to the total amount repayable at the end of the chosen loan term. Where deferral is chosen, the product is also subject to a maximum 90% combined back-end LTV. Separately, whether or not they have chosen to defer the monthly interest cost, landlords can also choose whether or not to link the final repayment amount to the value of the property.
How the equity partnership works now
A landlord's equity is calculated at the outset as the property's value minus the existing first charge mortgage amount. Pauzible's second-charge financing sits below the first charge mortgage in terms of repayment priority in the event of a default.
The funds raised from Pauzible must be used primarily for business purposes, whether to fund a deposit on another buy-to-let purchase, or finance a refurbishment or an EPC upgrade, or simply strengthen cash flow within a BTL portfolio. Funds can be disbursed within three to four weeks of a completed application, including all supporting documents.
Timelines can be affected by surveyor availability and how quickly independent legal advice is returned, for example.
What landlords pay monthly: rent share and interest cost
The monthly cost is split into two elements: monthly rent share and monthly interest cost. The monthly rent share matches the percentage of the property's value that has been released. A landlord who has released 20% of their property's value, for example, pays a monthly rent share (also referred to as “monthly premium”) equating to 20% of the market value of their monthly rent. The monthly premium increases annually by the inflation rate (RPI) plus 1%. The monthly premium must be paid monthly, regardless of actual monthly rent or void periods, and it cannot be deferred.
The separate monthly interest cost that also applies, however, can either be paid monthly or deferred to the end of the loan term, with the deferred interest compounding monthly and increasing the amount repayable on the final repayment date. The choice of interest payment method, whether ongoing or deferred, has an effect on the applicable combined LTV criteria, as mentioned above. Where the monthly interest cost is paid monthly, the arrangement remains subject only to the 85% combined front-end LTV limit. The 90% combined back-end LTV limit does not apply. Where the interest cost is deferred, however, both limits apply. The combined front-end LTV must not exceed 85%, while the combined back-end LTV must not exceed 90%.
Fixed or property value-linked: Choosing your final repayment
Landlords can also choose between two final repayment structures at the end of their chosen loan term. These are fixed or property value-linked. A fixed final repayment amount is an amount that is agreed upfront and does not move with the property's value.
A property value-linked final repayment moves with the property's value instead, with Pauzible sharing in the upside or downside, as the case may be. Downside-sharing only applies to the five-year property value-linked product option, and only after the end of year three. On property value-linked products with two- and three-year terms, or if a property value-linked product with a five-year term is repaid early within the first three years, the property value that is used to calculate the repayment amount is the higher of the initial value and the value at the time of the early repayment.
Four Pauzible product variations, each available for two, three and five-year terms
The choice between fixed and property value-linked repayment, combined with the choice to pay the interest cost monthly or defer it to the end of the loan term, creates four broad variations for landlords:
1. Fixed repayment with interest paid monthly
If the landlord pays the interest cost monthly, the 85% combined front-end LTV restriction applies, but the 90% combined back-end LTV restriction does not apply. The landlord continues paying the agreed rent share and interest cost during the term, while the fixed final repayment is not affected by changes in the property's value.
2. Fixed repayment with interest deferred
If the interest cost is deferred, the arrangement is subject to both the 85% combined front-end LTV and 90% combined back-end LTV limits. The landlord pays the rent share monthly, but the deferred monthly interest component compounds and increases the amount repayable at the end of the loan term.
3. Property value-linked repayment with interest paid monthly
The 85% combined front-end LTV restriction applies, but the 90% combined back-end LTV restriction does not apply. The final repayment amount is linked to the value of the property. On the five-year product, where the downside-sharing provision applies after the end of the first three years, a fall in the value of the property can reduce the repayment amount, while a rise increases it.
4. Property value-linked repayment with interest deferred
This arrangement is subject to both the 85% combined front-end LTV and 90% combined back-end LTV limits. The final repayment amount reflects the property value-linked calculation, including the deferred monthly interest.
All four product variants are available for two, three or five years terms.
Subject to Underwriting
Regardless of which product variant and term a landlord chooses, the amount of equity that they are actually able to release from their property with Pauzible will depend on the outcome of Pauzible’s underwriting process. This process takes into account many different factors, including, for example, anti-money laundering and credit checks; financial history; tax history; independent property valuation and rental income; first charge mortgage balance and terms and conditions; and affordability assessment.
Conclusion
Our equity partnership model continues to offer landlords a way to unlock cash from their buy-to-let equity while retaining 100% ownership. Following the updates to our product, landlords can choose between a two-, three- or five-year term; monthly payment or deferral of monthly interest (but not the monthly rent share); and a final repayment amount that is either fixed upfront or linked to the property's value. If you are considering applying for one of our products, as either a returning or a new client, please use our calculator to explore how much equity you might possibly be able to release and contact us to discuss the arrangement further. The eventual outcome will, of course, be subject to underwriting.
FAQs
Q. What is Pauzible's Fixed Term Equity Partnership?
A. It is a financing product for business buy-to-let landlords that unlocks equity trapped in a property for business purposes, giving landlords a lump sum today while they retain 100% ownership of their property. It is a second charge loan which, in terms of priority, sits below the existing first charge mortgage, over a chosen term of two, three or five years.
Q. How much can a landlord release?
A. Landlords can release up to £500,000 per property, subject to property value and available equity. All Pauzible products are also subject to a maximum 85% combined front-end LTV. Where monthly interest is deferred, the products are also subject to a maximum 90% combined back-end LTV. The amount that is actually released against any given application depends on the outcome of Pauzible’s underwriting of that application. Our underwriting process includes, for example, anti-money laundering and credit checks; financial history; tax history; independent property valuation and rental income; the existing first charge mortgage balance and terms and conditions; and affordability assessment.
Q. What does a landlord pay during the term?
A. Landlords pay a monthly rent share that matches the percentage of the property's value released, plus an interest cost that can be paid monthly or deferred to the end of the loan term. Deferred interest compounds monthly, increasing the total owed on the final repayment date.
Q. What are the final repayment options?
A. Landlords can choose between a fixed final repayment amount which is agreed upfront or a property value-linked repayment amount that depends on the property's value.
Q. Does Pauzible truly share in a fall in property value?
A. Yes, on the property value-linked product with a five-year term after the end of year three. On property value-linked products with two- and three-year terms, or if a five-year term product is settled within the first three years, the property's value that is taken into account for the purposes of calculating the repayment amount is the higher of the initial value and that at time of repayment.
Q. Does releasing equity through Pauzible affect an existing mortgage?
A. Pauzible's financing is in addition to the landlord's existing first-charge mortgage, which continues as normal alongside the new arrangement.
Q. How long does it take to receive funds?
A. Funds can potentially be disbursed within three to four weeks of a completed application, including all supporting documents, subject to underwriting. Timelines can be affected by surveyor availability and how quickly independent legal advice is returned, for example.
Q. Are HMO, MUFB and holiday let properties eligible?
A. Yes, HMO, multi-unit freehold block and holiday let properties all remain within scope under the current terms, subject to underwriting.
Q. Who is eligible for Pauzible's financing?
A. Applicants must be business BTL landlords whose BTL properties are located in England and Wales and who are resident in the United Kingdom and, if they do not hold a UK passport, have been resident in the UK for at least three years. In case an applicant is not resident in the UK at the time of application, then a UK service address needs to be provided. Applicants may apply in personal names or via a limited company or special purpose vehicle, consistent with the ownership structure of the relevant BTL property. All applications are subject to Pauzible's underwriting criteria.
About the author
Sunil Chander
Co-Founder
Sunil oversees operations and compliance at Pauzible, drawing on his extensive experience as the founder and CEO of Dawnbud Limited, a financial services consulting firm. His prior career included senior roles in investment banking at Smith New Court and NatWest. He holds an MBA from LBS, M Litt from Oxford and a PhD from Cambridge.
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