Mortgages for limited company directors

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Can I get a mortgage as a company director?

Yes, you can get a mortgage as a limited company director! But it can be a little more difficult compared to someone who’s a full-time employee. 

This is because a lot of mainstream mortgage brokers and lenders just aren’t set up to cater for people with incomes that differ from the norm. Limited company directors are usually classed as self-employed, and a lot of mortgage lenders don’t like complexity.  

Company director incomes can be complex for all kinds of reasons. Maybe the company is new and hasn’t been trading for that long, which means you don’t have three years’ worth of accounts. Maybe you’re not sure what you can count as your income. Or maybe you have retained profit and need to be able to use that as a source of income.

Whatever the reason, you just need to speak to a specialist mortgage broker who specialises in different incomes. And that’s where we come in. Our Mortgage Experts have plenty of experience getting mortgages for limited company directors, and will make your application look as good as possible to lenders.

Got questions?

How long must I have been a limited company director to apply for a mortgage?

It’s a common myth that a company must have been trading for at least three years’ in order for a director to get a mortgage, but that isn’t true. Some mainstream lenders might impose this criteria, but there’s plenty of lenders who will consider you without three years worth of accounts. 

In fact, there are specialist lenders who’ll be prepared to approve applications from people who are self-employed with just one year’s worth of accounts, or in instances where the director actually classes as a contractor. The key thing for lenders is that you can demonstrate your earnings, that can be a 12 month view of your accounts rather than a tax return.

If you’ve just gone self-employed and have limited trading history and accounts, it’s still possible to be approved for a mortgage as long as you work with a specialist mortgage broker. They’ll be able to advise you on the kind of evidence the lender will need to prove your income. Our Mortgage Experts have made plenty of mortgages possible for limited company directors with limited accounts, so get in touch to find out your options

What can be counted as income as a company director?

One thing that’s guaranteed to hamper your mortgage application is evidence of varying income. The majority of lenders will want to look at a broad average of your income, which can be good or bad depending on your circumstances.

While each lenders’ requirements may differ, there are three types of document you will generally need to provide as proof of your income:

  • Between one and three years’ of accounts, certified by an accountant

  • Copies of statements for all your business and personal bank accounts

  • An SA302

 Most of the time, lenders won’t consider retained profit to be part of your earnings. This is why they generally prefer to look at dividends as a measure of income instead.

What kind of deposit will I need for a mortgage as company director?

The amount of deposit you’ll need to put down depends on a few different factors: what your credit history is like, and also how long you’ve been trading. 

Lenders will always want to see your credit history to decide how much deposit you’ll need to put down on your home. If you’ve had credit issues in the past, for example late or missed payments, CCJs, IVAs or a repossession, this will impact how much a lender will let you borrow and how much deposit you’ll need. Usually, the better your credit history, the less you’ll need to put down on a deposit. A larger deposit will also mean you’ll generally get access to the best mortgage rates.

Read more in our Guide: How Much Deposit Do I Need to Buy a House in the UK?

Can I borrow based on my company’s retained profits?

The issue around getting a mortgage using retained profits is that many high street banks and lenders want you to only borrow money based on money you’ve personally earned yourself, rather than your business.

And this is why so many company directors get turned down when they want to get a mortgage this way. 

If this is the way you want to apply for a mortgage, a specialist mortgage broker will be a better option. They’ll be able to really get to know your current financial situation and find a suitable lender who will be willing to discuss your use of retained profits.

How does bad credit affect my chances of getting a mortgage if I’m also a company director?

Having a bad credit history can add complications to a company director’s mortgage application.

The biggest challenge you’ll face is that the number of lenders who will consider your application is lower than for directors who have an excellent credit rating. Sometimes when starting a business, you can hit financial difficulties in the early days. It happens, especially during turbulent times and during the start-up phase. Some of the world’s most successful businesses came close to going under before hitting the big time. So this shouldn’t mean you can’t get a mortgage. 

But to many mainstream lenders, bad credit and self-employment make an application complicated. 

But it’s entirely possible to get a mortgage as a company director with a bad credit rating. You just need to work with a specialist broker (like us!) who understands the complexities of your financial circumstances. You can get a full picture of your credit file with checkmyfile*. It's free with a 30-day trial (usually £14.99).

*Heads up, when you click through to our affiliate links, we may earn a small commission at no extra cost to you. We only recommend sites we truly trust and believe in.

What if my business has made a loss? Can I still get a mortgage?

Yes, you can still get a mortgage if your business has made a loss. A lot of mainstream lenders might turn you down, but it’s not impossible. 

Specialist lenders are in a better position to understand the specific circumstances surrounding the losses and might consider approving a mortgage based on an individual scenario.  Especially if the losses weren’t in the last two years. Or they can easily be explained. Make an enquiry to find out your options.

Can I get a mortgage if I’ve recently changed my trading style?

Yes, you can get a mortgage even if you’ve recently changed your trading style. But most lenders will see this as a brand new business, so you’ll have the same limitations as you would if you’d just started out with no (or few) accounts. 

If you’ve recently changed your trading style, for example, from a sole trader to a limited company, lenders will still see this as a new business, regardless of how long you’ve been trading under your previous style. 

Specialist lenders are more likely to be flexible and look at your unique situation and consider you. Make sure you speak to a specialist mortgage broker who’ll know the lenders to approach. That's where we come in! Make an enquiry to speak to a Mortgage Expert.

Why use Haysto?

We get how it feels when you’re refused a mortgage. We’ve been there. Haysto exists because the mortgage world is broken. If you don’t have a shiny credit rating, you’re self-employed with a complex income, or just don’t fit the mould, the odds are completely stacked against you. We just don’t think that’s fair.

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Unlike others, we only work on bad credit, self-employed and complex mortgages. That’s all we do. And we’re up for a challenge.


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