Yes, dividends usually count as income for a mortgage if you are a limited company director. Most lenders add your salary and dividends together, then average the last two years or use the latest year if your income has fallen. Some lenders ignore dividends altogether and use your salary plus your share of company profit instead, which can give a very different figure for the same director.
Key takeaway: A low salary topped up with dividends is one of the most common ways directors pay themselves, and it does not stop you getting a mortgage. What changes the outcome is which lender reads your figures. Lenders differ on how many years they average, what happens if dividends fall, and whether they look at dividends at all.
[[stats: 1 Year = Minimum accounts needed | Up to 6.5x = Income with the right lender | 90+ = Lenders compared]]
Why do directors take a low salary and high dividends?
For most small company owners it is simply the tax-efficient way to be paid. A salary around the personal allowance, which is £12,570 for 2026/27, keeps income tax and National Insurance low, and the rest is taken as dividends, which are taxed at different rates and do not attract National Insurance. Your accountant will usually set this up as standard.
The trouble is that some mortgage calculations are built around employed applicants. On a payslip alone, a director on a £12,570 salary looks like a low earner, even if they take £50,000 or more a year in dividends and their business is doing well. That is why it is important to apply to a lender that assesses directors properly, rather than one that reads you like an employee.
Do dividends count as income for a mortgage?
With most lenders, yes. Once you hold a meaningful shareholding, commonly 20% or 25% depending on the lender, you are generally treated as self-employed, and the lender looks at your salary and dividends together as your income. These usually need to be evidenced through your SA302 tax calculations and tax year overviews, or an accountant's certificate.
Two rules come up again and again:
- Which years are used. Many lenders average your last two years if income is steady or rising, but use only the latest year if it has fallen.
- Dividends must be covered by profit. Several lenders will not count dividends above the company's net profit after tax. If you have paid out more than the business made, the lender may cap your income at your share of profit instead.
How do different lenders treat salary and dividends?
Here is how some lenders describe their approach in their own intermediary criteria. It shows how much the same set of figures can be read differently.
[[table: Lender | What it uses for directors | Which year ;; NatWest | Salary and dividends, for directors with 20% or more of the shares | Average if income is level or rising, latest year if it has fallen. Dividends should not exceed net profit after tax ;; Nationwide | Salary and dividends | The lower of the latest year or the two-year average ;; TSB | Salary and dividends | Average if income has risen, latest year if it has fallen ;; Accord | Latest year's salary plus dividends | Dividends use the lower of the two-year average or the latest year ;; HSBC | Salary plus share of net profit after corporation tax, not dividends | Two-year average, or the latest year if lower ;; Coventry Building Society | Salary plus share of net profit after corporation tax, not dividends | Usually the latest year, with two years' figures provided]]
Criteria correct as at October 2026. Lender criteria change regularly, so treat this as a guide rather than a live rate sheet. There are many other lenders with their own rules.
What if my dividends went down last year?
Many lenders will use the lower, latest figure, which can reduce what you may be able to borrow. This catches out directors who took a large dividend one year and a smaller one the next, even if the company's profits were steady and the rest was simply left in the business.
Lenders that assess your share of company profit rather than dividends may help here, because they look at what the business made rather than what you chose to draw.
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Can I get a mortgage on dividends only, with no salary?
It may be possible. Lenders that use salary and dividends look at your total, so a director who takes no salary at all is assessed on dividends alone. Lenders that use salary plus net profit look at the company's earnings rather than what you have drawn, which can help a director who has taken very little out.
Example: Chris, East Sussex, was a limited company director with only one year's accounts who had not drawn any income from the business. Quanstrom Financial placed his £666,000 mortgage with Pepper Money, who can use one year of salary and net profit for directors who are majority shareholders. Names changed. Every case is different, and lending depends on your circumstances and lender criteria.
How much could I borrow on salary and dividends?
Most lenders lend around 4.5 times income, with 5 to 5.5 times available in the right circumstances and up to 6.5 times with certain lenders where the profile is strong. For a director, though, the multiple matters less than which income figure it is applied to.
Example: A director takes a £12,570 salary and £37,430 in dividends, and their company makes £105,000 profit before corporation tax. On salary and dividends, a lender sees £50,000 and at 4.5 times could lend around £225,000. A lender using salary plus pre-tax profit sees £117,570 and at 4.5 times could lend around £529,065. This is an illustration only and not a quotation.
Try your own figures in the calculator below. It shows salary and dividends side by side with salary plus your share of profit, across a range of income multiples.
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Our guide to salary vs dividends vs pension for a mortgage sets out how each part of a director's pay can be read by lenders.
What documents will I need?
- Your latest two years' SA302 tax calculations and tax year overviews, or an accountant's certificate
- Your latest company accounts, prepared by a qualified accountant
- Recent personal and business bank statements
- Payslips or a P60 for your salary, if the lender asks
Our step-by-step guide shows how to get your tax calculation and tax year overview from HMRC. If you are paid only through PAYE with no dividends, our guide to mortgages for company directors on PAYE covers your options. For the full picture, including lender comparisons, see our main guide to mortgages for limited company directors.
Speak to a mortgage broker in Eastbourne
Quanstrom Financial is a whole-of-market mortgage broker based in Eastbourne, helping limited company directors across East Sussex, including Hailsham, Seaford and Bexhill, and across the UK by phone or video. A mortgage broker at Quanstrom Financial can look at how you pay yourself and show you which lenders may read your figures most favourably, whether you are buying a home or remortgaging. Find out more about how Quanstrom Financial works as a mortgage broker for limited company directors.
Book a free consultation through the contact page to find out what you could borrow.
Frequently asked questions
Do dividends count as income for a mortgage?
Yes, with most lenders. If you are a limited company director with a meaningful shareholding, lenders commonly add your salary and dividends together and use an average of the last two years, or the latest year if your income has fallen. Some lenders use salary plus your share of net profit instead of dividends.
How do lenders assess dividend income?
Most look at dividends shown on your SA302 tax calculations and tax year overviews, or on an accountant's certificate. They usually average two years if income is level or rising and use the latest year if it has dropped. Many will not count dividends above the company's net profit after tax.
Can I get a mortgage on a low salary as a company director?
In many cases, yes. A low salary is common for tax reasons, and lenders that assess directors look at your dividends or your share of company profit as well. The key is applying to a lender that treats you as a director rather than reading your payslip in isolation.
What happens if my dividends dropped last year?
Many lenders will use the lower, latest year, which can reduce your borrowing. A lender that assesses your share of company profit may give a better result if the business made a steady profit and you simply drew less, subject to their criteria.
Can I get a mortgage on dividends only?
It may be possible. Lenders using salary and dividends will look at your total drawings, even if there is no salary. Lenders using salary plus net profit may help if you have drawn very little, as they look at what the company earned.
Can my dividends be more than my company's profit?
Lenders are generally cautious about this. Several will not count dividends above the company's net profit after tax, and may cap your income at your share of profit instead. Your accountant can confirm whether past dividends were covered by available profits.
Is a limited company director self-employed for a mortgage?
Usually, once you own a significant share of the company. The threshold varies by lender, commonly 20% or 25%. Below that, some lenders may treat you as employed and use your payslips, although dividend income can change that with some lenders.
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 or tax 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.
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