A director mortgage is a mortgage specifically designed for limited company directors who may take a lower salary but receive income through dividends, retained profits, or other business earnings. Unlike standard mortgages, these mortgages consider the full financial picture, including company performance.

Yes, as a company director, you can secure a mortgage, but traditional lenders may struggle to assess your income correctly. Many high-street banks focus only on your basic salary and dividends, which may not reflect your true earnings.

Specialist lenders take into account:

• Retained profits in your company
• Salary and dividends
• Net profit before tax
• Multiple years of accounts, if available

At Watts Mortgage & Wealth Management Ltd, we work with lenders who understand the flexibility of director income and can offer more suitable mortgage terms.

The amount you can borrow depends on your income, credit score, and lender criteria. Many lenders offer 4.5 to 5 times your annual income, but specialist lenders may allow more if retained profits are included.

For example, if your salary is £20,000 and dividends are £50,000, a high-street lender may assess your income as £70,000—potentially allowing you to borrow around £315,000 (at 4.5x income). However, if your company has £100,000 in retained profits, specialist lenders may factor that in, increasing your borrowing potential.

The required deposit depends on the lender and your financial profile. Generally, you can secure a mortgage with as little as 10% deposit, but having 15-20% can provide access to better interest rates and lending terms.

Most lenders prefer at least two years of trading history, with two years of accounts or tax returns. However, some specialist lenders accept applications from directors with just one year of trading, provided your business is profitable and growing.

Many high-street banks do not include retained profits in their affordability assessment, but specialist lenders do. This is crucial for directors who leave profits in the company rather than taking large dividends.

At Watts Mortgage & Wealth Management Ltd, we work with lenders who consider retained profits, increasing your borrowing power.

Yes, it is possible to get a director mortgage with bad credit, but options may be limited. Your mortgage eligibility will depend on factors such as:

• The severity and recency of credit issues (e.g., missed payments, defaults, CCJs)
• Your deposit amount (a larger deposit can improve your chances)
• The overall financial health of your business

If you have adverse credit, our team can help find a lender willing to offer a competitive mortgage deal.

To apply for a mortgage as a company director, you typically need to provide:

• Two years’ worth of company accounts (some lenders accept one year)
• SA302 tax calculations and tax year overviews (from HMRC)
• Latest three to six months of business and personal bank statements
• Proof of ID and address (passport, driving license, utility bills)
• Company incorporation details

Yes, many lenders offer interest-only mortgages for company directors, particularly if you have a strategy to repay the loan, such as:

• Future business profits or dividends
• Sale of company shares or assets
• Investment portfolio growth

Interest-only mortgages can help manage cash flow, but it’s essential to have a solid repayment plan.

Using a specialist mortgage broker like Watts Mortgage & Wealth Management Ltd ensures that your full financial situation is presented correctly to lenders. Here’s why working with us benefits you:

• Access to specialist lenders who understand director income
• Increased borrowing potential by including retained profits
• Faster mortgage approvals with lenders experienced in complex income structures
• Expert mortgage advice tailored to your business and financial goals

If you’re a company director looking for the right mortgage, our expert brokers can help you secure the best deal. We specialise in tailored mortgage solutions for business owners, ensuring you get the most competitive rates and borrowing terms.

Contact Watts Mortgage & Wealth Management Ltd today to discuss your mortgage options and start your application.