Yes, you can get a mortgage using company retained profits, but only with some lenders.
These lenders treat the profit your company has kept as part of your income, which can raise your borrowing limit. Many others look only at your salary and dividends.
Retained profit is the money left in a limited company after tax and dividends. Directors who own most of the company often build up a large pot of it, because they draw only what they need. Lenders worry that the money is not yours until you take it out. A broker who knows which lenders take a different view can save you a lot of time.
This guide explains how retained profits work, how lenders count them and what proof you need.
Retained profits and your mortgage: key figures
These are the figures that matter most when you plan a mortgage as a company director. Each source links to the page the figure comes from.
| Figure | Value | Period | Source |
|---|---|---|---|
| Dividend allowance | £500 a year | 2026 to 2027 tax year | GOV.UK: tax on dividends |
| Dividend tax, basic rate band | 10.75% above the allowance | 6 April 2026 to 5 April 2027 | GOV.UK: tax on dividends |
| Dividend tax, higher rate band | 35.75% above the allowance | 6 April 2026 to 5 April 2027 | GOV.UK: tax on dividends |
| Corporation tax, small profits rate | 19% on profits of £50,000 or less | Current in October 2026 | GOV.UK: Corporation Tax rates |
| Corporation tax, main rate | 25% on profits over £250,000 | Current in October 2026 | GOV.UK: Corporation Tax rates |
| High income multiple limit | 15% of new mortgages at 4.5 times income or more | Bank of England paper, April 2026 | Bank of England: CP6/26 |
What are retained profits?
Retained profit is the profit a company keeps after it has paid corporation tax and any shareholder dividends. Accountants also call it retained earnings, and you find it on the balance sheet under “profit and loss reserves”.
The sum is simple. Take the retained profit brought forward, add this year’s profit after tax, then take away the dividends paid.
For example, say your company makes £128,000 profit after tax in a year. You pay yourself £78,000 in dividends and leave £50,000 in the company. That £50,000 is your retained profit. You also draw a £12,000 salary, which the company has already paid as a business cost.
Repeat that for four years and the company holds £200,000 of retained profit, or £50,000 a year on average.
Retained profit is an accounting figure, not a bank balance. The money may be tied up in stock, equipment or unpaid invoices. A lender will want to know how much of it is real cash.
You pay no dividend tax on profit you leave in the company, and tax only arises when you take the money out as a dividend.
Why many lenders ignore retained profits
Most lenders base your income on what you actually receive.
For a company director, that means salary and dividends. Retained profit belongs to the company until it is paid out to you.
Lenders also see risk, because a bad year can use up the money you have kept.
Company law adds a limit. GOV.UK says a company must not pay out more in dividends than its available profits from the current and previous financial years.
A lender may ask whether the retained profit could be paid to you, or whether the company needs it to keep trading.
How lenders count retained profits
Lenders that accept retained profits use one of a few methods. There is no single rule, and each lender sets its own.
The methods lenders use
- Salary plus dividends. The lender ignores retained profit. This is the standard method.
- Salary plus your share of net profit. The lender counts your share of the company’s profit after tax, whether or not you drew it.
- Salary, dividends and retained profit. The lender adds a share of the money you left in the company, often averaged over two or three years.
Your shareholding is important.
A lender will only use your own share of the retained profit. For example, if the company holds £200,000 and you own 25%, a lender may count £50,000. At 50% that is £100,000, and at 75% it is £150,000.
What lenders use as your income
Directors with a small shareholding may count as employed instead. The lender then bases your income on payslips. The cut-off differs between lenders. Our guide to company director mortgages covers this in more detail.
Lenders do not use turnover.
Turnover is what the business takes in before costs, so it says little about what you can afford. For sole traders and partners, lenders use profit before tax. For shareholding directors, they use PAYE salary, dividends and sometimes undrawn profit.
How much could you borrow?
Most lenders cap a mortgage at around 4.5 times your income, and some go higher for strong applications.
At the time of writing, Bank of England rules limit lenders to making 15% of their new mortgages at 4.5 times income or more. In April 2026, the Bank of England asked for views on giving each lender more room to set its own share, while keeping the overall limit at 15%. It expects the change in the second half of 2026.
For example, take the company above. Your £12,000 salary plus £78,000 in dividends gives £90,000. At 4.5 times income, a lender that ignores retained profit would offer up to £405,000.
A lender that also counts the £50,000 left in the company sees £140,000 of income. At the same 4.5 times, that is £630,000, or £225,000 more.
Not every lender will agree and each one runs its own affordability checks, so treat these figures as an illustration only. Our guide on how much income you need for a mortgage shows how income and borrowing link.
What lenders ask to see
Lenders must check your income with evidence. The FCA’s mortgage rules in MCOB 11.6 say a lender must assess whether you can afford the loan and cannot rely on a general declaration. Our page on self cert mortgages explains why lenders ask for proof of your income.
Documents to have ready
Expect to be asked for:
- Two to three years of company accounts. Some lenders accept one year.
- Your SA302 tax calculations and tax year overviews.
- A recent balance sheet that shows your profit and loss reserves.
- An accountant’s reference or certificate that confirms your income.
- Personal and business bank statements.
HMRC lets you print an SA302 for the last four years once you have sent your return. You can print a tax year overview for any year. Check that your lender accepts documents you have printed yourself.
How lenders read your accounts
If the accounts do not show your latest income clearly, a lender may ask for more. Many lenders average your income over a few years, which can lower the loan.
Some look only at the latest year, which helps if your profits are rising. Our page on gross and net income shows how lenders choose the figure they use.
Should you take profit out before you apply?
Taking a bigger dividend can lift your income on paper, but it has a cost.
GOV.UK gives a £500 dividend allowance for the 2026 to 2027 tax year. Above that, dividends are taxed at 10.75% in the basic rate band and 35.75% in the higher rate band, from 6 April 2026 to 5 April 2027.
The company also pays corporation tax on its profit before any dividend. At the time of writing, GOV.UK shows 19% on profits of £50,000 or less and 25% above £250,000. Companies in between may get marginal relief.
The timing problem
Timing is the hard part. Profit you leave in the company builds your retained profit, but the same profit cannot also show up as dividend income.
You have to choose a year or two ahead, and a business that needs its cash may not have that choice. No split suits everyone. The right balance depends on your tax band, how soon you want to buy and whether the lenders open to you count retained profit at all.
Taking money out also cuts the cash the company holds. Lenders look at the trend across your accounts, so one large payout may not help. Speak to your accountant before you change how you draw income. A broker can then tell you how lenders would treat the new figures.
Other checks lenders make
Retained profit is only one part of the picture. Lenders also look at:
- Affordability. They compare your income with your living costs and debts. See our guide to mortgage affordability.
- Debts. Credit cards, car finance and student loans all reduce what you can borrow.
- Stress tests. Lenders check you could still pay if rates rose. Read more on the mortgage stress test.
- Your deposit. A bigger deposit means a lower loan to value, which usually brings a lower rate. See our guide to deposits.
- Credit history. Some lenders still lend after missed payments, but often at a higher cost or on stricter terms.
Most mortgages are repayment mortgages. Interest-only is less common, and the lender will want a clear plan to repay the loan at the end. Read how to repay an interest-only mortgage and compare the options in our guide to mortgage types.
Tips to improve your chances
- Speak to a broker early and ask which lenders count retained profits.
- File your company accounts on time and ask your accountant for a clear profit and loss reserves figure.
- Keep personal and business banking separate.
- Have your SA302s and tax year overviews ready for the last three years.
- Pay down debts you can and keep your credit file clean.
- Read our guide to applying for a mortgage so you know each step.
- Work with an experienced mortgage broker who deals with shareholding directors every week.
Speak to a mortgage broker
A mortgage using retained profits is possible, but the lender you choose decides the result. One lender may count a large sum and another may count none. The same company can get offers that are far apart.
Respect Mortgages is not a mortgage broker and does not give mortgage advice. We can introduce you to an independent mortgage broker who knows the lenders that accept retained profits. There is no charge for using our site or asking for an introduction.
Call 0330 030 5050 or contact a mortgage broker online.
Frequently Asked Questions
Retained profits are the profits a company has kept after paying tax and dividends. Accountants also call them retained earnings. They sit under “profit and loss reserves” on the balance sheet. A company builds them up over the years if the directors draw less than the company earns.
If you own a limited company, lenders look at your salary and dividends, and some also count your share of the company’s profit. Most want two or three years of accounts. A broker who knows which lenders suit your set-up can save you time and rejected applications.
No. Many lenders count only salary and dividends. A smaller group includes retained profit or your share of net profit, and each sets its own rules, so offers for the same director can differ widely. A broker can compare the lenders that take a wider view.
No, net profit is what the company earns in one year after costs and tax. Retained profit is what is left after dividends, and it builds up across years. Two companies with the same net profit can hold quite different retained profit if one pays out far more.
Expect more paperwork, because lenders need company accounts as well as personal tax records. Your income is also less fixed than a payslip. Many lenders still lend to directors, and specialist lenders look at each case individually. A broker can present your income the way lenders expect.
Most want SA302 tax calculations and tax year overviews, plus company accounts. Some also ask for an accountant’s reference. You can print an SA302 for the last four years once you have filed your return, and a tax year overview for any year.
