If you run your business through a limited company, the mortgage you are offered often has very little to do with what your business actually earns. Most high street lenders look only at the salary and dividends you have drawn, which for a tax-efficient director is deliberately kept low. The right lender will instead assess your share of the company's profits, and that single difference can more than double what you are able to borrow.
Key takeaway: As a limited company director you do not need to draw more money out of your business, and pay more tax, just to get the mortgage you want. A smaller group of lenders will assess your salary plus your share of company profit, accept as little as one year's accounts, work from your latest year rather than a two-year average, and add pension contributions back into the figure they use.
[[stats: 1 Year = Minimum accounts needed | Up to 6x = Income with the right lender | 5% = Minimum deposit available | 100% = Company profit considered | Exclusive rates = Via our lender network | National = Coverage across the UK]]
Why company directors get caught out
Almost every limited company director is advised, quite sensibly, to structure their income tax-efficiently. That usually means a modest salary somewhere around the National Insurance threshold, topped up with dividends kept below the higher-rate tax band, with the rest of the profit left inside the business.
It is good tax planning. It is terrible mortgage planning, at least as far as a mainstream lender is concerned.
A high street lender assessing a limited company director mortgage will typically take your salary plus dividends, average the last two years, and lend a multiple of that figure. A director drawing £50,000 while their company turns a £150,000 profit is assessed on the £50,000. The profit sitting in the business, which is genuinely theirs, is simply ignored.
The instinctive fix is to draw more out. That works, but it is expensive: you pay dividend tax on money you only withdrew to satisfy an underwriter, and you often need to do it a full tax year or two before you apply. There is a better route.
Six things that can transform what you borrow
These are the criteria points that make the biggest practical difference to a company director mortgage. Not every lender offers all of them, and no single lender is best for everyone. Find the row that describes your situation below, then read the detail underneath.
[[table: What can help | What it means in practice | This is likely to apply if ;; One year's accounts | You are assessed on a single year of trading rather than two or three | You have recently incorporated or moved from sole trader to limited company ;; Company profit, not drawings | Salary plus your share of company profit, rather than only what you withdraw | You keep drawings low and leave profit in the business for tax efficiency ;; Reducing profits accepted | The latest, lower year can still be used rather than declined outright | Last year's profit was down on the year before ;; Pension contributions added back | Employer pension contributions are added back into the profit figure | Your company makes substantial pension contributions on your behalf ;; Latest year used on its own | Your most recent year replaces a two-year average | Your profits have grown year on year ;; Next year's projection | An accountant's forecast, evidenced by three months of business bank statements | Your business has stepped up recently and the accounts have not caught up]]
1. One year's accounts can be enough
The common belief is that you need two or three years of trading history before any lender will look at you. In reality, a minimum of one year's accounts is workable with the right lender. That matters enormously if you have recently incorporated, moved from sole trader to limited company, or left employment to go out on your own.
2. Company profits, not just personal drawings
This is the single biggest lever. Rather than looking only at what you have withdrawn, some lenders assess your salary plus your share of the company's profit. You keep your tax-efficient structure, leave the money in the business where it is useful, and still get assessed on what the business genuinely earns. There is no need to withdraw more funds and pay more tax purely to support a mortgage application.
3. Reducing profits do not automatically rule you out
A dip in profit is often assumed to be fatal. It is not. Some lenders will still proceed where the latest year is lower than the year before, particularly where there is a clear and evidenced reason: a one-off investment, a deliberate reinvestment in equipment or staff, a lost contract since replaced. Many lenders will use the lower, most recent figure in that situation rather than declining outright.
4. Pension contributions and other expenses added back in
Company pension contributions are an expense in your accounts, so they reduce the profit figure a lender sees. Yet they are money going into your own retirement, not money leaving the business for good. A number of lenders will add employer pension contributions, and certain other one-off or non-recurring expenses, back into the profit figure. On a director making substantial pension contributions this can add tens of thousands to the assessable income.
5. Your latest year's accounts can be used on their own
Where a two-year average would drag a growing business down, some lenders will use the latest year's figures alone. If your profit went from £60,000 to £120,000, an average assesses you on £90,000 while a latest-year lender assesses you on £120,000. On a 5x multiple that is a £150,000 difference in borrowing.
6. Next year's projections can be considered
A small number of lenders will go further and consider a projection for the coming year, prepared and signed off by a qualified accountant. What evidences that projection is your last three months of business bank statements, which need to show the business trading at a level consistent with the forecast figures. It is not available everywhere, but for a business that has stepped up recently it can be the difference between waiting a year for the accounts to catch up and buying now.
{{primary_cta}}
How do lenders actually assess a company director's income?
There are three broad approaches. Which one a lender uses, and which one suits you, depends on how your accounts look.
[[table: Assessment method | What the lender counts | Typically suits ;; Salary and dividends | Salary plus dividends actually drawn, usually averaged over two years | Directors who draw most of the profit anyway ;; Salary and net profit after corporation tax | Salary plus your share of profit remaining after corporation tax | Most tax-efficient directors leaving profit in the business ;; Salary and net profit before corporation tax | Salary plus your share of pre-tax profit, the most generous basis | Directors with strong profits and a lender who offers it]]
The gap between the first row and the last is not marginal. It is routinely the difference between a mortgage that does not work and one that comfortably does.
Example: A director takes a £12,570 salary and £37,430 in dividends, and their company makes £105,000 profit before corporation tax. Assessed on salary and dividends, the lender sees £50,000 and at 4.5x offers £225,000. Assessed on salary plus pre-tax profit, the lender sees £117,570 and at 4.5x offers £529,065. Same director, same business, same year - a difference of over £300,000. This is an illustration only and not a quotation.
How much can a limited company director borrow?
Income multiples for company directors sit broadly in line with everyone else: most lenders work around 4.5 times income, with 5 to 5.5 times available in the right circumstances and up to 6 times achievable with certain lenders where the profile is strong. The critical variable is not the multiple, it is which income figure that multiple is applied to.
Deposit requirements are also more normal than most directors expect. There is no automatic penalty for being a company director: deposits typically start from 5% of the property value, and some lenders can consider 0% deposit options depending on eligibility. Your shareholding does matter, though. Most lenders using the profit-based methods want you to hold a meaningful stake in the business, commonly 20% to 25% or more, before they will attribute a share of profit to you.
Use the calculator below to see how different income figures translate into borrowing. Enter your salary plus your share of company profit rather than just what you draw, and compare it against the salary-and-dividends figure to see the gap for yourself.
[[calc:borrowing]]
For a fuller explanation of how lenders treat different income types, our guide on how much you can borrow for a mortgage in 2026 covers the wider picture, and our general self-employed mortgage guide is a good starting point if you also trade as a sole trader.
What if I have changed from a sole trader to a limited company?
This is one of the most common ways a business owner loses borrowing power without realising it. Most lenders treat the date you incorporated as the start of a brand new business, which resets your trading history to zero. You could have been doing the same work for a decade, but on paper you are a one-year-old company again, and your options narrow accordingly.
That reset does not have to happen. Quanstrom Financial has access to lenders who are happy to still average your last two years of earnings across the change, or take your most recent year's earnings, provided you have remained the same operationally and there has been no change to the shareholding. If you are doing the same work, in the same way, with the same ownership, and the only thing that has changed is the legal wrapper around it, your track record can carry across rather than starting again.
Timing matters here too. If you are planning to incorporate and also planning to buy in the near future, it is worth a conversation before you make the change rather than after, because the order you do things in can affect which lenders are open to you. Our self-employed mortgage guide covers how sole trader income is assessed if you have not yet made the switch.
What if you work on a contract or day rate?
If you trade through a limited company but work on contracts, the picture changes again, and usually in your favour. Contractors such as IT contractors, associate dentists, CIS subcontractors and other day-rate professionals do not have to be assessed on their accounts at all with the right lender. Instead, the lender can work from the value of your contract.
Where your day rate is £500 or above, a lender will typically annualise it directly. A £500 day rate is multiplied by five days to give a weekly figure of £2,500, then multiplied by 46 working weeks, giving an assessable income of £115,000. That is the figure the income multiple is then applied to, regardless of what you have drawn or what your accounts show.
For most contractors this produces a considerably higher assessable income than a two-year average of net profit would, and it means you do not need a long trading history to demonstrate it. If this describes you, our guides on CIS contractor mortgages and mortgages for associate dentists go into more detail on how each is assessed.
Can I remortgage to put money into my business?
Yes, this is absolutely possible with the right lender. Raising capital against your home and injecting it into your limited company is a legitimate reason to borrow, but it is one that most lenders will not entertain. The majority of high street lenders specifically exclude business purposes from their list of acceptable reasons to raise funds, which is why directors are so often told it cannot be done.
It can. Quanstrom Financial has access to the banks who do permit capital raising for business purposes, whether that is funding growth, buying equipment, covering a tax bill or providing working capital. What a lender will want to understand is the purpose of the funds, how the borrowing is affordable alongside your existing commitments, and how your income is being evidenced, which brings you back to the assessment methods covered above.
It is worth being clear-eyed about what this means: you are securing business borrowing against your home, so the property is at risk if the business does not perform as expected. That is a serious decision and one worth talking through properly. Our remortgage advice page explains the wider process, and our complete remortgaging guide covers timing and lender choice in more detail.
Can you get a company director mortgage on a visa?
Yes. Running your own limited company while on a visa does not rule you out, and these mortgages are still available with the right lender. Your immigration status and your company structure are assessed as two separate things: the lender needs to be satisfied with your right to live and work in the UK, and separately satisfied with how your income is evidenced.
What tends to vary between lenders is how much time remaining on your visa they want to see, and what deposit they require. Some mainstream lenders are comfortable with visa holders at standard deposit levels, while others apply a higher minimum. Our guide to getting a mortgage on a Skilled Worker or Tier 2 visa covers the immigration side in full, so it is worth reading alongside this page rather than us repeating it here.
Can you buy a new build as a company director?
Yes. New build mortgages are not too dissimilar to standard mortgages, and the same income criteria generally applies. Everything covered above about company profit, one year's accounts, add-backs and latest-year assessment works the same way on a new build purchase as it would on an older property.
What differs is the property side rather than the income side. New build lending tends to come with its own deposit and valuation requirements, and mortgage offers often need to last longer because of build timescales. Our complete guide to new build mortgages explains what to expect from the purchase process itself.
Can you get a company director mortgage with bad credit?
Yes. Many adverse credit lenders specialise in exactly this kind of case, and a good number of them are equally comfortable assessing company profit rather than drawings. A credit issue and a limited company structure are generally assessed as two separate factors rather than compounding each other, though the realistic pool of lenders does narrow when both apply.
What matters most is the nature of the credit event, how long ago it was, and whether it has been settled, rather than the simple fact that it exists. Our guide to adverse credit mortgages explains what lenders actually look at and how different credit events are treated.
What documents will you need?
Different lenders ask for different things, and the assessment method drives the paperwork. Having everything ready gives you the flexibility to approach whichever lender suits your figures best, rather than being pushed towards whoever is easiest to satisfy.
- Your latest year's full limited company accounts, prepared by a qualified accountant
- Your last one to two years of tax calculations (SA302s) and tax year overviews
- Three months of personal bank statements
- Three months of business bank statements
- Where projections are being used, a forecast signed off by your accountant
- If you work on contract, a copy of your current contract showing your day rate and term
If you are not sure how to obtain your SA302s and tax year overviews from HMRC, our guide on how to get your tax calculation and tax year overview walks through it step by step.
Good to know: Lenders using profit-based assessment will generally want your accounts signed off by a suitably qualified accountant. If your accounts are prepared by someone without the relevant qualification, that alone can narrow your lender options considerably, so it is worth checking before you apply rather than after.
Timing your application
For a growing business, when you apply can be worth as much as which lender you approach. If your next set of accounts will show a materially stronger year, and you are not in a rush, waiting for them to be finalised can lift your borrowing significantly, especially with a lender who will use the latest year alone.
The reverse applies too. If you know profits are dipping this year, applying before the weaker accounts are filed may put you in a stronger position. This is exactly the sort of judgement call worth talking through with a mortgage broker at Quanstrom Financial before you commit to a timeline, because it is very difficult to unwind once an application is in.
It is also worth keeping your credit profile clean in the run-up. Lenders scrutinise director applications more closely than standard employed ones, so late payments, a blurred line between personal and business spending, or unfiled tax returns all cost you options. Our guide to credit scoring explains what lenders actually look at.
Why the right lender matters more than the right rate
Only a limited number of lenders will assess a company director on profit rather than drawings, and fewer still will combine that with one year's accounts, add-backs for pension contributions, or a forward projection. Several of them are not available to you directly, only through a broker.
Quanstrom Financial is a whole-of-market mortgage broker, so rather than approaching lenders one at a time and hoping, we can identify at the outset which lenders will read your accounts most favourably and place the case there. For a company director, choosing the lender who assesses your income correctly is worth far more than shaving a fraction off the rate with a lender who undervalues your business.
Frequently asked questions
Can I get a mortgage with only one year's accounts as a company director?
Yes, this is possible with a minimum of one year's accounts, although the choice of lenders is smaller than if you had two or three years. Lenders offering this will usually want to see that the business is established and trading well, and may look at your background in the same line of work before incorporating.
I have just changed from sole trader to a limited company. Does my trading history start again?
With most lenders, yes, which is why so many people are told they need to wait. Some lenders will still average your last two years of earnings across the change, or use your most recent year, as long as the business has stayed the same operationally and the shareholding has not changed. If you are planning to incorporate and buy at around the same time, it is worth taking advice before you make the change.
Do lenders use my salary and dividends or my company's profit?
It depends entirely on the lender. Most high street lenders default to salary plus dividends drawn, typically averaged over two years. A smaller group will use your salary plus your share of the company's net profit, either before or after corporation tax. For a tax-efficient director, the profit-based approach almost always produces a higher assessable income.
Do I need to pay myself more to get a bigger mortgage?
Not necessarily. Drawing more will increase the income a salary-and-dividends lender can see, but it also increases your personal tax bill, and the effect usually only shows up in the following tax year's figures. Using a lender who assesses company profit achieves the same outcome without withdrawing extra funds or paying more tax.
What happens if my company's profits have gone down?
Reducing profits do not automatically mean a decline. Some lenders will proceed using the latest, lower figure, particularly where there is a clear explanation such as a one-off investment or a temporary loss of a contract. Being able to evidence the reason makes a considerable difference to how it is viewed.
Can pension contributions increase the income a lender will use?
With some lenders, yes. Employer pension contributions reduce the profit shown in your accounts even though the money is going into your own pension. A number of lenders will add these back into the profit figure they assess, which can meaningfully increase your usable income if you contribute substantially.
Will a lender consider next year's projected profits?
A small number will, where the projection is prepared and signed off by a qualified accountant. The evidence a lender relies on is your last three months of business bank statements, which need to show the business trading at a level consistent with the projected figures. It is not widely available, but it can be valuable for a business that has grown recently and whose accounts have not yet caught up.
Can I remortgage to raise money for my business?
Yes, with the right lender. Most lenders do not permit capital raising for business purposes, but some do, and those are generally not the ones you would find on the high street. The lender will want to understand what the funds are for and satisfy themselves the borrowing is affordable. Bear in mind you would be securing business borrowing against your home.
I contract through my limited company. Will I be assessed on my accounts or my day rate?
With the right lender, your day rate. Where your day rate is £500 or more, lenders can annualise the contract value directly rather than looking at your company accounts, which usually produces a higher assessable income and requires far less trading history.
How much can a limited company director borrow?
Most lenders work to around 4.5 times income, with 5 to 5.5 times available in the right circumstances and up to 6 times achievable with certain lenders. The figure that multiple is applied to matters far more than the multiple itself, which is why the assessment method is the thing to focus on.
Does my shareholding percentage affect my application?
Yes. Lenders attributing a share of company profit to you will generally want you to hold a meaningful stake, commonly at least 20% to 25%. Your share of the profit is then usually calculated in proportion to your shareholding, so two equal directors would typically each be credited with half.
Do my accounts need to be prepared by a qualified accountant?
For profit-based assessment, generally yes. Lenders using company accounts rather than tax calculations will usually specify that the accounts must be signed off by an accountant holding a recognised qualification. It is worth confirming your accountant's credentials before applying, as this can quietly rule out lenders you would otherwise qualify for.
Written by Toby Quanstrom CeMAP, Director at Quanstrom Financial, a whole-of-market mortgage broker based in Eastbourne, East Sussex, specialising in mortgages for limited company directors and self-employed business owners.
This article is general information only and does not constitute personal advice. What you may be able to borrow depends on your individual circumstances and lender criteria. Calculator figures are illustrations only and are not a mortgage offer.
Your home may be repossessed if you do not keep up repayments on your mortgage. Think carefully before securing other debts against your home.
.svg)