£650,000 mortgage secured using limited company net profits and part interest-only repayments

Trinity Financial arranged a £650,000 mortgage for a company director whose limited company income made the application more complex.

The client

The client runs a limited company specialising in imports and exports. He was born in China and is now a British national.

Although the business was established and profitable, the client needed a lender prepared to assess the company’s net profits when calculating how much he could borrow.

Why was the mortgage application complicated?

Many mortgage lenders assess company directors using their salary and dividends. This did not provide enough income to support the required £650,000 mortgage.

Our broker therefore needed to find a lender willing to use the limited company’s net profits as part of its affordability assessment.

Only a small number of lenders were potentially suitable among those prepared to consider the company’s net profit figures.

The client also wanted part of the mortgage arranged on an interest-only basis to keep the monthly repayments more manageable. Interest-only applications can be subject to stricter affordability and repayment-strategy requirements, particularly for larger loans.

How did Trinity Financial help?

After reviewing the client’s company accounts, income and wider financial position, Trinity Financial recommended a large bank offering competitively priced rates.

We successfully demonstrated that the client could afford the mortgage using the company’s net profits and secured approval for a part-and-part repayment structure.

Half of the £650,000 mortgage was arranged on an interest-only basis, with the remaining balance on capital repayment. This helped reduce the client’s monthly contractual payments while ensuring part of the mortgage balance would be repaid each month.

The mortgage solution

The client secured a tracker mortgage with no early repayment charges. He thought that rates would come down over the medium term.

The initial rate was 0.30% above the Bank of England base rate of 3.75%. The tracker period lasts for 24 months from completion, after which the mortgage moves onto the lender's standard variable rate unless the client switches to another deal.

The absence of an early repayment charge provides additional flexibility. The client can review the mortgage if rates change or make overpayments without being tied into a fixed-rate deal.

Case study summary

Client: Limited company director in the imports and exports sector

Mortgage amount: £650,000
Property value: £1.1 million 
Income used: Limited company net profits
Repayment method: Part capital repayment and part interest-only
Interest-only proportion: 50%
Initial mortgage rate: 4.05% tracker
Early repayment charge: None
Lead source: Trinity Financial website

Need a mortgage using limited company net profits?

Company directors can sometimes struggle to borrow the amount they need when lenders assess only salary and dividends. Some banks and building societies may also consider retained profit, operating profit or the company’s share of net profit.

Trinity Financial’s brokers regularly help business owners and company directors secure mortgages using more complex income structures. We can compare lenders that assess limited company profits and explore capital repayment, interest-only and part-and-part mortgage options.

Call Trinity Financial on 020 7016 0790 to secure a fixed or tracker rate mortgage, book a consultation, or use our appointment calendar

The information contained within was correct at the time of publication but is subject to change. It is for general information purposes and is not advice.

Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage.