If you run your own business through a limited company, you already know the problem. Your accountant keeps your salary small and pays the rest as dividends, because for tax purposes that is usually the most efficient way to take money out. Then you apply for a mortgage and the bank looks at a £12,570 salary as if that is all you earn. Good tax planning, bad mortgage application.
The good news is that mortgages for company directors are not some niche product. Plenty of mortgage lenders want this business. They just measure a company director's income in different ways, and the way they measure it can move your maximum loan by six figures. My job is to know which lender does what before your mortgage application goes anywhere near an underwriter.
I have been arranging mortgages for 15 years and I set up Alexander Southwell in 2019. A good share of our clients are directors of limited companies: IT consultants, builders, dentists with their own practice, small agency owners, and people who have just gone from employed to running their own show. The paperwork is different, the questions are different, and the lender you would pick for an employed applicant is often the wrong one for a business owner.
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Every company director mortgage comes down to one question: what income will the lender use? There are two main answers, and most of the work I do is getting your case in front of the lender whose answer suits your figures.
This is the most common income assessment. The lender adds the salary you draw through PAYE to your dividend payments, taken from your SA302s and tax overviews, and usually averages the last two years or takes the latest year if it is lower. If what you draw broadly matches what the company makes, this works perfectly well and gives you the widest choice of mortgage products, including high street lenders and building societies.
Where it falls down is when you leave money in the business. Say the company makes a healthy profit but you only take what you need to live on. On that basis, the money sitting in the company account simply does not exist as far as the lender is concerned.
Some lenders look past what you have drawn and use your salary plus your share of the company net profit after corporation tax. That share follows your shareholding, so if you own 100% of the company you get 100% of the profit, and if you and your partner own 50% each, each of you counts half. People often call this using retained profits, because it counts the retained company profits you chose to leave in the business as well as anything you took out. For a director with strong company performance and modest drawings, it can transform their borrowing power.
This is the bit that trips people up. Using your share of profit is not a loophole or a special product. It is a normal residential mortgage with a lender whose eligibility criteria count company profits as your income. The rates can be exactly the same as everyone else's.
Criteria change, so treat this as a snapshot rather than a promise. At the time of writing, Virgin Money says that where a director holds 20% or more of the shares it uses a two year average of their share of net profit after tax plus their salary. Coventry Building Society also uses share of profit after corporation tax plus salary for directors with 20% or more. Accord, part of Yorkshire Building Society, will consider salary plus share of profit for directors holding more than 51%, and otherwise uses what you draw. Santander uses salary and dividends, and caps the dividend figure at your share of the profit after tax.
Then there are the specialist lenders, who have more flexible criteria for a shorter trading history, fluctuating income or a blip on your credit profile. Different lenders, different rules, and that is before anyone looks at your outgoings. This is why I always run your figures both ways before we choose the right lender.
Here is a typical case, with round numbers so you can follow the maths. Emma owns 100% of her consultancy. She pays herself a salary of £12,570 and takes £37,430 in dividends, so £50,000 a year in total. After her salary and other costs, the company makes £110,000 profit before tax. Corporation tax on that is roughly £25,400, which leaves £84,600 of net profit. She takes her £37,430 of dividends out of that and leaves about £47,000 in the business.
Same person, same company, same tax returns. One lender could offer around £225,000 and another could consider something closer to £437,000. Assuming her previous year looked similar, the two year average would land in the same place. Neither figure is guaranteed. Every lender runs its own affordability calculations, and mortgage affordability is personal, so your credit commitments, childcare costs, the loan to value and your credit history all pull the loan amount up or down. Some lenders may go to 5 times income or more for higher earners, and some lenders may go lower.
The other thing the example shows is that a small salary is not the problem people think it is. The problem is applying to a lender that only counts what you drew out.
How much can I borrow as a director? Put in your own figures to compare both methods. Use your share of the company's net profit after corporation tax from your latest accounts, and your shareholding as a percentage. If you share the company with someone else, enter only your own salary and dividends.
This calculator is for illustration only and is not financial advice. It uses simple income multiples and does not assess affordability, so it ignores your outgoings, your credit file and each lender's own rules. Speak to us for a figure based on real lender criteria and your individual circumstances.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Lenders want the same financial picture told by several pieces of paper: what the company earns, what you take out, and what lands in your personal account. Getting these together before we apply saves days, sometimes weeks, at underwriting. Lenders may also ask you to provide additional documentation once they have seen the first batch, which is normal.
SA302s and tax overviews
Your SA302 tax calculations and the matching tax year overviews from your HMRC online account, usually for the last two years. They show your salary and dividends exactly as HMRC sees them, and your accountant can download them in a couple of minutes.
Your company accounts
Full year end accounts for the last one or two years, prepared by your accountant. Lenders can also check what has been filed at Companies House, so make sure the figures match. Private companies have nine months from their year end to file, and lenders do notice when you are late.
An accountant's certificate or reference
Some lenders ask your accountant to fill in their own form confirming your salary, dividends and share of profit. Santander, for example, asks for an accountant's certificate for directors rather than SA302s. Most want a qualified accountant, such as a member of ACCA, ICAEW or CIMA.
Personal and business bank statements
Usually the latest three months of personal bank statements, showing your salary and dividends arriving. Some lenders require business bank statements too, particularly for a larger loan or a limited trading history.
Payslips and P60
Your PAYE salary still needs proving. Keep your latest payslips and your P60 to hand, even if the salary is only a few hundred pounds a month.
Proof of ID, address and deposit
A passport or driving licence, a recent utility bill or council tax bill, and proof of where your deposit has come from. If the deposit is coming from the company, it needs to have been paid to you properly as salary or dividends first.
One tip: if your year end has just passed, ask your accountant how quickly the new accounts can be finalised. A strong latest year can make a big difference, and no lender will use figures that have not been prepared yet.
Most mainstream lenders prefer two years of trading and two sets of accounts for limited company directors. That gives the underwriter a track record and evidence of stable earnings. But two years is a preference, not a law, and plenty of directors secure a mortgage sooner.
Some lenders will look at one year's accounts, particularly if you have moved from being employed into running a company in the same line of work. Think of the employed engineer who sets up a consultancy and does the same job for better money. Most lenders, including the specialist ones, still want at least a full year's trading history before they will look at you, and mortgage availability is narrower, so the deal may cost a little more. If you are only a month or two away from your first year end, it can be worth waiting.
Lenders usually take the lower of the latest year and the two year average. If profits have jumped, some will use the latest year alone, which helps. If they have dropped, expect questions about your future income. A short note from your accountant explaining why, such as a one off equipment purchase or big pension contributions, often does more good than people expect. A trading loss in either of the last two years rules out a lot of lenders, though not all of them, and some want three years of figures for very large loans.
If you are a director with a small shareholding, many lenders treat you like any other employee and assess your income from payslips and P60s. Virgin Money, Coventry and Santander all draw the line at 20%. Others use 25%. Being treated as employed can help, because the lender will not need accounts at all. It can also hurt if most of your money comes as dividends, so it is worth checking which side of the line you sit and how each lender treats your employment type.
At 20% or more, most lenders put you in the self employed box. That is when the choice between the two methods really matters. With joint shareholdings, the share is usually combined across the applicants, so a couple who own 50% each and buy together can both count their part of the company's profitability.
Money you take out of the company that is not salary or dividends sits in a director's loan account. Lenders generally will not count it as income, and Santander, for example, says director's loans cannot be used. An overdrawn director's loan account also shows up in the accounts and can make an underwriter ask how much you rely on the company to cover your own bills. If yours is large, take your accountant's advice on tidying it up before your next year end.
Most directors pay a small salary and top it up with dividends for tax efficiency. Since April 2026 dividend tax has gone up again, to 10.75% at the basic rate and 35.75% at the higher rate, and the tax free dividend allowance is only £500. So some accountants now suggest leaving more profit in the company, or paying more into a pension, rather than drawing big dividends to cover personal tax bills.
That is sensible for your business finances, but it shrinks your income in the eyes of a lender that only counts drawings. If you plan to buy or remortgage in the next year or two, tell your accountant. You might draw a bit more before your year end, or simply choose a lender that uses your share of profit. Either way, it is far easier to plan this in advance than to fix it afterwards, and it is worth thinking long term.
If you are a contractor running a one person company, you may not need your accounts at all. Many lenders will assess you on your contract rate instead, whether your contract sits inside or outside IR35. If your contract is inside IR35 and you are paid through payroll, your accounts might understate your income badly, so the contract route is often better. Our contractor mortgages page explains how that works.
Deposit requirements for directors are no different to anyone else's. With two years of trading and a good credit history, a 5% or 10% deposit can be possible. A larger deposit moves you into a lower loan to value band, where interest rates are usually lower, a competitive rate is easier to find and more lenders say yes. With a shorter trading history or credit problems, expect to need 15% or more.
Your personal credit matters as much as the company's figures. Late payments, defaults and a high debt to income ratio all reduce what a lender will offer, and they push up your mortgage repayments. If you are not sure what is on your credit report, start with our credit file guide before you apply.
Lots of directors are first time buyers too, and most first time buyer schemes work the same way for you as for anyone else. A mortgage in principle is a sensible first step, as long as it is done with a lender that assesses directors the way you need. If you already own, the same income rules apply when you remortgage or are moving home. Budget for stamp duty when you buy; our stamp duty calculator gives you the figure in seconds.
People often confuse a mortgage for a company director with a mortgage as a company. This page is about you buying your own home in your own name. If you want to buy a rental property through a company, usually a special purpose vehicle set up just to hold property, that is limited company buy to let. The lender looks mainly at the rent rather than your salary, and the tax position is completely different.
You can go straight to your own bank, and sometimes that works. The risk is that the bank only has one way of reading your accounts, and if it is the wrong way you get a low figure or a decline, plus a search on your credit file. A specialist broker with whole of market access, and experience of company director mortgages, can see how multiple lenders treat the same set of figures before anyone applies. Lenders get twitchy about complex income structures, and complex mortgage applications go far better when the underwriter gets the full story up front.
This is what we do as a company director specialist:
We are fee free on over 90% of the mortgages we arrange. There is a £299 fee on mortgages under £100,000, and complex or adverse cases can carry a fee of up to £995. If a fee applies to you, you will know in writing before we start. Our team has submitted over 2,500 mortgages and you can read what clients say on our reviews page.
Sources: published intermediary lending criteria from Virgin Money, Coventry Building Society, Accord Mortgages and Santander (checked October 2026), GOV.UK tax on dividends and GOV.UK guidance on company annual accounts.
Yes. Company directors get mortgages every day, often at the same rates as employed borrowers. The key is matching your income structure to a lender whose criteria suit it, and having your SA302s, tax overviews and accounts ready.
It depends on the lender. Many use what you have drawn. Others, such as Virgin Money and Coventry Building Society at the time of writing, use your salary plus your share of net profit after corporation tax if you own 20% or more of the company. If you leave retained profits in the business, that route could mean you can borrow a lot more.
Two years opens up the most lenders. Some lenders will consider one year's accounts, especially if you were previously employed in the same field. Most want at least 12 months of trading before they will look at an application.
Most mortgage lenders offer around 4 to 4.5 times the income they accept, and some go higher for larger incomes. The real question is which income they use, and several factors such as your outgoings and deposit affect the final figure. Try the calculator above to see how much you can borrow, then let us check it against real lender criteria.
With many lenders, no. Directors with a shareholding below 20% are often assessed as employed, using payslips and a P60. Some lenders set the line at 25%. If most of your income is dividends, check how each lender treats you, depending on the lender it can go either way.
Usually only once it has been paid to you as salary or dividends and is sitting in your personal account. Most lenders will not accept a deposit straight from a business account or a director's loan. Gifted deposits from family are fine with the right paperwork.
No. A small salary topped up with dividends is completely normal, and lenders expect it. A small salary with modest dividends and lots of retained profit is where lender choice matters, because only some lenders will count that profit as part of the director's income.
Some lenders insist on one, Santander being an example for directors. Others are happy with SA302s and tax overviews. Having a qualified accountant makes everything easier, as some lenders will not accept figures prepared by an unqualified one.
Often, yes. Specialist lenders accept defaults, CCJs and missed payments depending on how old they are and whether they have been settled. You may need a larger deposit and the rate is likely to be higher, so it is worth cleaning up what you can first.
Some lenders allow you to raise capital for business purposes, but many do not, and those that do want to see exactly where the money is going. It is a case by case decision, so speak to us before you apply. Releasing equity from your home puts it at risk if the business struggles.
Here is how the mortgage process works with us, from the first call to your mortgage offer.
A short chat about your company, your shareholding and what you want to buy. We tell you straight away if anything needs sorting first.
We gather your SA302s, tax overviews and accounts, and work out your income both ways so you can see the difference.
We compare how lenders assess your income, their rates and their fees, then recommend the most favourable deal for you.
We get an agreement in principle with the chosen lender, so you can make offers with confidence.
We submit the mortgage application with a case summary for the underwriter and chase it every step of the way.
Once the valuation and checks are done, the lender issues the offer and we keep your solicitor in the loop until completion.
Lending criteria change often. A lender that suits company directors one month can tighten up the next, which is why we check live criteria on every case.
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