The Ltd Co director mortgage guide: why salary + dividends isn't the whole story
If you run a limited company and your accountant has done their job properly, your drawings look modest on paper. You pay yourself the salary that avoids income tax. You take dividends. But the real story — the profit sitting in the company — stays invisible to most mortgage lenders. Here's why that matters, and what you can do about it.
The high-street view (and why it undersells you)
Most high-street lenders — Halifax, Natwest, Barclays, Nationwide — look at salary plus dividends. That's the number on your SA302s and your bank statements. If you've retained £80,000 of profit in the company for tax reasons, they see none of it. Your assessed income might be £47,570 when the real economic picture is £127,570. The mortgage offer reflects the smaller number.
The specialist lender alternative
Around 8–10 lenders — including Halifax (in specific cases), Kensington, Clydesdale, Saffron, Aldermore and some private banks — will use salary plus your share of the company's net profit (after corporation tax). This is the number that appears in the accounts, not just what you drew down. For a director who retains profits, this can change borrowing by hundreds of thousands of pounds.
What documents do you need?
Two years of finalised company accounts. Your last two SA302s and corresponding tax year overviews. Three months of personal bank statements. An accountant's certificate is sometimes required. The accounts need to be signed off — not draft, not pending. If you're 'a bit behind on filing', fix that before you apply anywhere.
The other mistake directors make
Changing how they pay themselves in the year before applying. If you switch from dividends to salary in April because someone told you it would help, you've broken your income history and most lenders will ignore the change. The time to think about the mortgage is before you change anything — not after.
What to do next
Call me before you apply anywhere, and certainly before you make any changes to your accounts or drawings. I'll tell you which lenders will use your retained profit, what multiple they'll apply, and what you can realistically borrow. It's a 15-minute conversation and it regularly results in people discovering they can borrow £100,000 more than they thought.
Running a limited company and wondering what you can borrow?
Tell me your setup. I'll tell you which lenders will use your retained profit and what that means for your borrowing.
Book a free call →