Based on a real case completed in 2026. Names, figures, dates and some details have been changed so the client cannot be identified, but the way the numbers behave is accurate. Lender criteria change often, so this shows how the assessment worked at the time, not what any lender will offer now.

Who

A company director in her fifties, sole shareholder of her own limited company

The house

Offered £385,000. Seller wanted £405,000. £60,000 deposit saved.

The snag

On salary plus dividends the loan was 5.8 times her income. Too high for almost every lender.

The outcome

Placed with a lender that assesses directors on profit before tax. Completed and moved in.

The situation

A client in her fifties runs her own limited company and owns all of the shares. She had found a house she wanted, offered £385,000, and the seller came back asking for £405,000. She had £60,000 saved as a deposit and wanted to know, quickly, whether either figure was realistic. This case study is part of my self employed mortgage hub, where every guide I have written for company directors, sole traders and contractors sits in one place.

Her income on paper was £10,000 in salary and £46,000 in dividends, £56,000 in total.

The first answer

On salary plus dividends, which is how most high street lenders assess a company director, £385,000 with £60,000 down means borrowing £325,000. That is 5.8 times her income. Most lenders stop somewhere between 4.5 and 5.5 times, and a handful go to 6 times for the right case. The £405,000 offer would have needed £345,000, which is 6.2 times income. Neither number worked.

At that point the honest reply would have been that she needed a cheaper house or a bigger deposit. Two things made me look harder.

What the accounts showed

The first was the company's own profit. Directors often leave money in the business, and some lenders will count that retained profit as income. Here it would not have helped, because the company made £44,500 after tax in its latest year and she drew £46,000 in dividends. Nothing had been left behind.

The second was the profit before tax, which was £56,300. Most lenders that use company profit take the figure after corporation tax, which in this case gave a lower income than her dividends did. But a small number assess a director on salary plus her share of the profit before tax. On that basis her income for the application was £66,300, not £56,000.

That one change moves the £325,000 loan from 5.8 times income to 4.9 times. It moves the case from a long shot to one that sits inside normal lending.

What else had to be checked

A higher income figure does not make a case simple. Before anything went near a lender there were several things to work through.

The company had a second, minority shareholder until the previous year, who transferred their shares to my client. That meant her share of the earlier year's profit was less than 100%, and the change needed a clean paper trail from Companies House.

Profit had fallen about 10% year on year and costs had risen. Lenders read accounts, and a falling trend gets questions. The explanation had to be ready rather than improvised.

In her fifties, the mortgage term is shorter than a younger buyer would get, which makes the monthly affordability calculation tighter even when the income multiple looks fine.

She also held savings and investments of around £120,000 outside her pension. I cannot advise anyone on whether to sell investments, and her pension was not available to her at her age. But it mattered that she knew what a larger deposit would do: every extra £20,000 put down takes roughly 0.3 off the income multiple, and £25,000 more would have brought the £405,000 house into the same range as the £385,000 one.

The outcome

The case was placed with a lender that assesses directors on salary plus profit before tax. The application went through underwriting with every requirement met: the two years of accounts, the explanation for the fall in profit, the paperwork on the share transfer and the affordability calculation on a term suited to her age.

The purchase completed and she and her family have moved into the house she had set her heart on. A few weeks earlier, on the first set of numbers, she had been told it was out of reach.

What this shows

The same set of accounts produced three different income figures depending on which lender was looking at them: £54,500 on salary plus profit after tax, £56,000 on salary plus dividends, and £66,300 on salary plus profit before tax. The client's earnings did not change. The method did.

For a company director, the question is rarely "how much can I borrow". It is "which lenders assess my income in the way that suits my accounts".

That is only answerable by reading the accounts and the lender criteria side by side.

If you run a limited company and have been given a borrowing figure that looks low, it is worth having the accounts looked at properly before you give up on a property.

This is one case, not a rule. Every application is assessed on its own facts, lender by lender, and your circumstances may produce a different answer. Your home may be repossessed if you do not keep up repayments on your mortgage.