Company directors will often pay themselves with a mix of wages and dividend payments, or just dividends in some cases. Whilst this can offer tax benefits, it can often muddy the water when it comes to making a mortgage application.

In this short guide, we’re going to explain whether dividends count as income for a mortgage. We will then go onto explain how you can possibly get a mortgage based on dividends, rather than a regular traditional income model.

Do dividends count towards a mortgage?

Dividends can count as income towards a mortgage with certain lenders. Not all lenders will let you use dividends for a mortgage, so it’s worth working with a specialist advisor who understands the market, lenders, and application process for limited company directors.

It often makes good sense for directors to pay themselves a combination of PAYE salary and dividends, as this mix of income could help sway the mortgage application favourably.

However, many lenders will need to be satisfied that the dividend amounts you have declared are sustainable for your limited company over a long period of time, and not just a temporary dividend payment which isn’t a reliable indicator of monthly income.

Due to the varied criteria that UK mortgage lenders have with regards to applicants having to prove income, it’s worth asking an expert for advice. Our panel of advisors are able to offer free initial advice today with one quick call.

Getting a mortgage when paid in dividends

Company directors need to prove to a mortgage lender that they are able to afford the monthly repayments. They will ask you to show that you have sufficient monthly income sources to not default on payments.





For the majority of employees, this is simple enough to do as they can provide monthly payslips. For many company directors, this is not as simple, due to their payment structures.

But that doesn’t mean it’s impossible.

By using an experienced mortgage advisor who is used to working on dividends mortgage applications, you could be well on your way to getting a decision in principle.

How can I get a mortgage based on dividends?

There are a number of ways of getting a mortgage when you are only paid in dividends. Here’s how you might be able to get a mortgage using this method:

  • Dividend income can be treated the same way as monthly wage by lenders, but it can depend on how regular the dividend payments are.
  • Lenders will want to see the dividend is regular and can be relied upon to provide a stable income, similar to a wage.
  • Lenders will also require you to provide a letter from your accountant that confirms the regularity, history and amount being paid out to the applicant.
  • History is particularly important, typically a minimum of 6 months
  • Personal bank statements showing the dividend payment is often requested

If you are a limited company director who gets paid with a mix of dividends, wages, bonuses, directors loans, and other income sources then the lender will want:

  • 6 months personal bank statements showing a regular income amount will help to reassure a lender.
  • Couple this with a full explanation from the applicant and supported by the most recent years Tax Calculation is enough for most lenders.
  • Regular payments can be calculated at 100% whereas occasional bonuses may only be taken at 50% for income multiple purposes.
  • If bonuses are regular and of the same amount i.e. £5,000 every quarter then a lender is much more likely to accept all of the bonus for income purposes

How your dividends mortgage application could work

If you would like to explore the options available to you, please get in touch. By answering just 5 quick questions you could be well on the way to getting a decision in principle on a dividends mortgage application.

Here’s how our mortgage advisors work:

  • On first contact, one of our mortgage agents will take a few basic details of your mortgage requirements.
  • You will then be asked for a convenient time for a specialist mortgage adviser to contact you back.
  • The mortgage adviser will confirm your requirements and discuss any questions you may have.
  • Based on the information that you give the adviser will research the market to find the most suitable mortgage for your particular needs. This is all done without any commitment on your behalf.
  • The adviser will discuss the options available to you. If you wish to proceed you will be given a list of lender requirements. These will include the completion of an application form, ID, proof of income as standard, along with any other information the lender may require.
  • Once you have provided this information the adviser will seek a formal “Decision In Principle” This is the green light to say that a lender would like to offer you a mortgage in Principle and will be subject to a formal valuation of the property that you wish to buy or remortgage. There will most likely be additional requirements that your adviser will talk through with you.
  • On receipt of a satisfactory valuers’ report and lending requirements the lender will make a formal mortgage offer in writing.
  • Your adviser will assist you all the way through to completion of your purchase or remortgage.

Handy Hint: We’ve published an in-depth guide on how limited company directors can get mortgages, including all the steps they need to take to submit a successful application.

What to do next…

If you would like to talk with a specialist advisor with experience in helping company directors get mortgages based on dividend income, please start your enquiry today.

By just answering 5 simple questions you could be on your way to getting a decision in principle with a dividend mortgage application.