Will a lender use my salary and dividends, or company profit?

It depends entirely on the lender. Most use salary plus dividends. A meaningful number will use salary plus your share of net profit whether or not you drew it, and a smaller group will consider retained profit. For a tax-efficient director the difference is often substantial.

Can retained profits be used for a mortgage?

Some lenders will consider accumulated retained profit, usually where you hold a controlling or full shareholding and your accountant can confirm that drawing it wouldn't harm the business. It's a genuine route, but it's a minority position — it needs confirming before you build a budget on it.

How many years of accounts do I need?

Two years is the usual expectation. Several lenders will work from one full year where the business is established and the figures are strong. Fewer than twelve months of trading narrows the panel considerably, and pricing usually reflects that.

My profits fell last year — does that stop me borrowing?

Not necessarily, but it changes the conversation. Many lenders will use the lower recent figure or a two-year average. Where the fall was a one-off — capital investment, a pension contribution, an exceptional cost — an accountant's explanation can allow it to be added back.

Do I need a qualified accountant?

For most lenders, yes. References are generally accepted from accountants holding a recognised qualification such as ACA, ACCA, CIMA, CIPFA or equivalent. A bookkeeper without those credentials will restrict your options, so it's worth checking early.

I own less than 25% of the company — how am I assessed?

Below a quarter of the shares, most lenders treat you as employed and assess your salary and any bonus from payslips and P60s rather than the company accounts. That's often simpler, though it can understate the total picture — so it's worth reviewing both readings.

Your Home Finance

Company director?Your payslip is the smallest part of your borrowing power.

Salary, dividends, retained company profit and your shareholding can each change the income figure a lender uses — often dramatically. Lender treatment varies, so the choice of lender can materially affect what you can borrow.

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Situation grid

How does your company pay you?

Salary plus dividendsSelect →Profit left in the companySelect →Only one year's accountsSelect →Profits down on last yearSelect →Several companies or shareholdingsSelect →Buying through a limited companySelect →Large or complex borrowingSelect →Credit issues plus director incomeSelect →

How your case is assessed

How lenders assess company director income

The same set of accounts can produce very different income figures depending on whether the lender counts salary and dividends only, salary plus your share of net profit, or retained profit — and on how large your shareholding is. Knowing which basis applies before you apply is most of the work.

Salary

What appears on your payslip and P60. For tax-efficient directors this is often a modest figure and, on its own, rarely reflects what the business supports.

Dividends

Amounts you have drawn from post-tax profit. Salary plus dividends is the most common lender basis — and usually the least flattering when profit is deliberately left in the company.

Retained / company profit

A meaningful group of lenders will use salary plus your percentage share of post-corporation-tax net profit, whether or not you drew it. A smaller group will also consider accumulated retained profit on the balance sheet, usually with accountant confirmation.

Shareholding

Your percentage ownership decides how much of the profit a lender will attribute to you — and whether you are assessed as a director at all. Below about 25%, many lenders treat you as employed on salary and bonus instead. Controlling or 100% shareholding is often required where retained profit is considered.

Which years, and which direction

Two years of accounts is typical; some lenders accept one. If profits rose, most will use the latest year. If profits fell, expect the lower figure or a two-year average — and expect underwriters to ask why.

You don't need to restructure how you pay yourself to find out where you stand — we work the figures against real lender criteria before any hard search.

Specialist insight

Not every lender reads company accounts the same way

Falling profits · one year's accounts · minority shareholding

Higher challenge

Narrower panels · retained profit rarely considered · the story behind the numbers needs preparing with your accountant before an application goes anywhere.

Stable or rising profit · clear shareholding · accounts up to date

More lender choice

Broader high-street and specialist panels · net-profit and retained-profit bases become available, often at mainstream rates.

Independent reviews

Live verified reviews — not cherry-picked on-page quotes.

Jay Sabine

CeMAP, Cert CII (MP)

Specialist in company director and complex income mortgages

Over 30 Years' ExperienceFCA Regulated

Expert mortgage adviser specialising in complex cases including adverse credit, self-employed borrowers, and first-time buyers. All advice is tailored to your individual circumstances.

Content reviewed: 13 October 2026

CeMAP awarded by The London Institute of Banking & Finance. Cert CII (MP) awarded by the Chartered Insurance Institute.

“Directors spend years arranging their affairs to pay less tax, then meet a lender that reads the same accounts and sees someone on £12,000 a year. Both readings are correct. Only one of them borrows.”

Reviewed by Jay Sabine · Mortgage adviser · Over 30 years' experience

Lived experience

Mistakes we repeatedly see

Not theory — patterns that keep showing up when directors are assessed on drawings alone.

Optimising tax without checking the mortgage cost
Keeping drawings low is sound tax planning and expensive borrowing planning. The fix usually isn't to draw more — it's to use a lender that counts net profit. But that decision has to come before the accounts are finalised, not after.
Assuming retained profit always counts
Some lenders consider it, most don't, and the ones that do attach conditions on shareholding and business health. Building a purchase budget around retained profit before confirming a lender will use it leads to a collapsed offer late on.
Applying with accounts that aren't finalised
Draft accounts and unfiled returns create underwriter queries at exactly the wrong moment. Where a year-end is imminent, the sequence of accounts, tax calculation and application matters more than speed.
Not explaining a dip in profit
A large equipment purchase, a director's pension contribution or a one-off cost can depress net profit for a year. Left unexplained, it reads as a business in decline. Evidenced properly by your accountant, it's often added back.

Real client scenarios

Real mortgage journeys

Based on genuine cases we've helped with. Personal details have been changed to protect privacy.

£14k salary on paper — net profit told the truth

£14k salary
Profit retained in company
Net-profit basis
Borrowing more than doubled

Situation: Sole director of a profitable trading company, paying himself a small salary and modest dividends while reinvesting the rest.
Challenge: Two high-street lenders assessed him on salary and dividends and offered a figure nowhere near the family home he was buying.
What changed: We moved to a lender that uses salary plus the director's share of post-tax net profit, supported by two years of finalised accounts and an accountant's reference.
Outcome: Offer issued at more than double the earlier figure, without changing how he pays himself.
Why it worked: His income had never been the problem. The basis on which it was measured was. Choosing the lender before applying was the whole advice.

Profits dipped — and the dip was explained

Profit down 30%
One-off capital spend
Added back
Latest-year basis

Situation: Two directors buying a larger home, with the most recent year's net profit well down on the year before.
Challenge: On the face of the accounts the business looked to be shrinking, and lenders were defaulting to the lower recent figure.
What changed: We had the accountant confirm the fall was a single large capital purchase and a one-off pension contribution, then placed the case with a lender willing to add both back.
Outcome: Assessed close to the stronger underlying trading position, and the purchase proceeded.
Why it worked: Underwriters can accept an explanation. They can't invent one. The evidence went in with the application, not after a query.

What happens after you get in touch

From first contact to a clear answer

What happens when you get in touch — no hard search at this stage.

We look at the whole picture — salary, dividends, net profit, shareholding and the last two years' direction (no hard search)
Jay works out which assessment basis produces the truest figure for your accounts
We discuss the realistic route and, where useful, what your accountant should confirm
If proceeding: Agreement in Principle → application → completion

Reassurance

Free initial review — before any hard credit search
We identify the assessment basis before you approach a lender, not after a decline
Wrong lender first hurts more than waiting — we guide the sequence

Before you enquire

What we'll ask you on the first call

Straightforward questions — no hard credit search at this stage.

Your salary and dividends for the last two tax years
Net profit before and after corporation tax, and how much you've retained
Your shareholding percentage, and whether there are other directors
Whether your latest accounts are finalised, and when your year-end falls

Advisory promise

When we might tell you to wait

We won't always tell you to apply today.

We may advise waiting where a year-end is weeks away and the new figures would materially improve your position, where accounts aren't finalised, or where a single year of trading would become two and open a far wider panel.

If waiting for the next set of accounts would meaningfully widen your options, we'll say so before another footprint goes on your file. We give advice — not just applications.

Straight answers

Common questions about company director mortgages

Our promise

What we'll never do

Tell you to apply if it won't work
Send applications everywhere
Recommend borrowing beyond your budget
Hide bad news

We don't judge you on your payslip. We work out what your business genuinely supports.

Find out what your accounts actually support

Tell us your salary, dividends, profit position and shareholding — we'll assess what's realistically possible.

We don't recommend a lender until we've worked out whether salary and dividends, share of net profit, or retained profit gives you the stronger figure.

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No credit check first
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A five-minute conversation can be worth more than a year of restructuring how you pay yourself.

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Struggled to get approved elsewhere? We specialise in complex cases including CCJs, self-employed income, and declined applications. Over 90% of our clients had concerns about their situation before speaking to us.

Related guides

If your case hinges on one of these questions, these chapters go deeper.