Can I get a mortgage using the profits retained in my business?
Tags: Residential mortgages, Self-employed mortgages
It is possible to get a mortgage if you run a company and keep profits in the business without withdrawing them.
More mortgage lenders are happy to assess a client’s overall financial situation rather than their salary or dividend income.
Trinity Financial has access to a host of lenders that provide retained profit mortgages at market-leading rates through large banks such as Barclays for Intermediaries, Virgin Money, and Bank of Ireland.
Many business owners think it is harder to get a mortgage if they are self-employed, but this is not always the case.
Aaron Strutt, product director at Trinity Financial, says: “If your turnover was £500,000, for example, and your net profit was £250,000 with an £8,000 salary, some of the lenders would use the £258,000 based on the two-year average to calculate the maximum loan size.
“Our brokers also have access to a couple of lenders using the latest years' figures and even projected earnings, but this is on a case-by-case basis.”
Income multiples and deposits
Some of the banks and building societies offering retained profit mortgages also provide mortgages of up to 5 times salary, or even 5.5 times salary.
Self-employed borrowers will need typically need a 40% deposit to access the most competitively priced rates. Although the rates are still very well priced if you have 15% to put toward your property purchase or remortgage.
Case study
We recently helped a client to secure a £1.5 million retained profits mortgage. As the director and owner of a large firm, he had retained profits and wanted to use the money to borrow up to five times his salary. He also asked us to keep his monthly payments as low as possible and arrange an interest-only mortgage.
Speak to a Trinity Financial adviser today
The mortgage market moves fast — and the right advice can make a significant difference to the rate and deal you secure. Get in touch with our team to discuss your 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.
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