Case Study: How a Limited Company Director Used Share of Net Profit to Borrow More for a Mortgage

At J Finance, we understand that mortgage lending can be more challenging for self-employed business owners, especially when income is structured through dividends and retained profits.

Here’s how we helped a limited company director secure a larger mortgage by using their share of net profit, rather than just their salary and dividends.

Client Profile

  • Name: James (Limited Company Director)

  • Business: IT Consultancy (Operating for 5+ years)

  • Situation: Needed a mortgage for a £600,000 home

  • Challenge: His salary and dividends didn’t reflect his full earning potential.

The Problem

James had been running a successful IT consultancy for several years and wanted to buy a new family home.

However, like many limited company directors, he paid himself a modest salary (£12,000 per year) and took dividends (£38,000 per year) to optimise tax efficiency.

When he approached high-street lenders, they would only consider:

❌ Salary + Dividends (£50,000 per year total)
❌ Mortgage Offer Based on Standard Income Multiples (~£220,000 loan)

This was far below what James could actually afford. His business was generating a strong net profit of £150,000 per year, but traditional lenders didn’t take this into account.

The Solution: Using Share of Net Profit for a Larger Mortgage

After speaking to J Finance, we recommended a specialist mortgage lender who would assess James’s share of net profit, rather than just his salary and dividends.

How We Structured the Mortgage

  • Net Profit of Business: £150,000 per year

  • James’s Share of Net Profit: 100% (as sole director)

  • New Recognised Income for Mortgage Purposes: £150,000 instead of £50,000

  • Loan Approved Based on Higher Earnings

This tripled the borrowing power compared to standard lender criteria!

Mortgage Details

  • Property Price: £600,000

  • Mortgage Secured: £480,000 (80% LTV)

  • Interest Rate: Competitive fixed-rate deal

  • Term: 25 years

  • Lender: Specialist provider offering mortgages for self-employed applicants

By working with a lender who considered retained business profits, James was able to borrow what he truly could afford, rather than being limited by a low salary.

The Result

✔️ Mortgage Secured for £600,000 Property – James could buy his dream home without needing to increase his salary or dividends.
✔️ Larger Borrowing Power – By using his share of net profit, he was able to secure nearly three times more than standard lenders offered.
✔️ Kept His Tax-Efficient Salary Structure – No need to change how he withdrew money from his business.
✔️ Competitive Interest Rate – With the right lender, James got a deal comparable to traditional mortgages.

How J Finance Helped

✅ Identified the Right Lender – Connected James with a mortgage provider who assessed retained profits as part of income.
✅ Maximised Borrowing Potential – Ensured he could get the largest mortgage possible without changing his financial setup.
✅ Guided Him Through the Process – Simplified the self-employed mortgage application process.
✅ Secured a Competitive Deal – Found a mortgage with great terms, despite his complex income structure.

Are You a Business Owner Struggling to Get a Mortgage?

If you’re a limited company director and want to borrow more for a mortgage, specialist lenders can help by considering retained profits, not just salary and dividends.

At J Finance, we work with self-employed mortgage specialists to help business owners secure the mortgage they deserve.

📞 Call us today for a free consultation.
📩 Book an appointment to discuss your mortgage options.

Your business success should work in your favour – let J Finance help you maximise your borrowing potential.