Mortgage for Company Director on PAYE
Your new home or investment property is just a mortgage application away. And with our expertise and tenacity, that property dream is closer than you think.
Get in touch for a no-obligation chat about how we might be able to help you.
What's On This Page?
Get In Touch
Mortgage for Company Director on PAYE
Lee Hammond explains how the mortgage process works for company directors on PAYE.
Can you explain what a company director on PAYE is? Is it harder to get a mortgage as a company director on PAYE?
A company director on PAYE refers to a director of a company who is also treated as an employee for tax purposes, under the Pay As You Earn (PAYE) system in the UK.
If a director is paid a salary by the company, they are usually put on the payroll just like any other employee. Getting a mortgage as a company director on that basis is definitely possible.
It’s not necessarily more difficult than for a regular employee, but there are a few extra considerations that lenders take into account.
Can I still get a mortgage if I’m a company director on PAYE and only have one year’s accounts?
The simple answer is yes. You can still get a mortgage as a company director on PAYE with only one year of accounts, but it is generally more challenging. That may limit your options, as many high street lenders typically require two to three years of accounts.
What’s the difference between PAYE and LTD? Does this affect the mortgage process?
PAYE is the tax system used by HMRC to collect income tax and national insurance from employees’ wages. It is applied to employees and company directors who take a salary.
A limited company is a legal business structure where the company is a separate entity from its owners. The company can pay its directors a salary via PAYE plus dividends from profits. The company is responsible for its own taxes, such as corporation tax and VAT.
PAYE is generally easier for lenders to assess income if it’s a regular salary. It will require simple documentation such as payslips. A limited company is more complex and lenders may need to see company accounts, tax calculations and possibly assess the business health.
How will lenders assess my income as a company director on PAYE? How is affordability calculated?
If you’re a director of a limited company and on PAYE, lenders will usually assess your income based on salary and dividends. Sometimes your share of net profits or retained profits can be used.
Typically, lenders will take an average of the latest two years’ income – or use the latest year if these figures are lower than the prior year. Lenders use affordability calculators to determine how much you can borrow. They consider your total annual income, based on salary and dividends, your monthly outgoings, your credit score and the Loan to Value, which is essentially how much deposit you have.
Speak To an Expert
Come on in and be quite forward with what you’re after – just be very honest with your mortgage broker. It’s good to make sure that we know absolutely everything about you. That way we can’t be blindsided by a lender. An open book policy is very good when coming to see your mortgage broker.
What documents do I need to prepare?
As a company director on PAYE, lenders may require SA302s, which are tax calculations, and tax year overviews to complement those.
We will also probably need to see full company accounts and three months’ business bank statements. It can be more in some scenarios. Lenders will possibly request a letter or reference from your accountant confirming income and the sustainability of the business.
What if my payslips are not considered as PAYE income?
Even if you’re paid through PAYE, lenders may still classify you as self-employed when you own more than 20% to 25% of the company and have control over your own salary. The same applies if your income is supplemented by dividends or retained profits.
In these cases, lenders treat your income as self-employed and not as standard PAYE employment.
Can I get a mortgage as a company director on PAYE if my accountant is working to maximise profit in my business for tax purposes?
Yes, you can still get a mortgage as a company director on PAYE, even if your accountant is working to maximise profit or minimise tax liability.
However, whilst this is tax efficient, it can reduce your assessable income, which is the income that lenders use to determine your affordability.
How much can I borrow and what deposit will I need?
With the majority of clients I speak to these are the big, burning questions.
Lenders will assess your income based on their own affordability calculators. Typically, you can borrow up to four to five times your annual income, with some lenders potentially able to increase these income multiples in certain scenarios.
Typically, the minimum deposit required is 5%. However, some lenders have mortgage schemes where the deposit can be lower than this – and some lenders do not require a deposit at all [correct at the time of recording in June 2025].
Can I get a Buy to Let mortgage as a company director on PAYE?
Absolutely, you can get a Buy to Let mortgage as a company director on PAYE, and in many cases, it’s quite straightforward. Your income typically will be assessed in the same manner as a residential mortgage.
There are some Buy to Let lenders who have no income requirements and base affordability on the expected rental income from the property being purchased.
How does bad credit affect me getting a mortgage as a company director on PAYE?
You can still get a mortgage as a company director on PAYE with bad credit, but it will depend on the severity and type of credit issues.
Lenders take into account your credit report, the type of adverse credit you have, how old it is, when it occurred, and the frequency of credit issues.
They’ll also assess your current financial stability and whether the issues were a one-off or ongoing. It’s assessed on a case-by-case basis, but certainly something that still can be considered.
How does remortgaging work as a company director on PAYE?
Remortgaging as a company director on PAYE works similarly to remortgaging for other borrowers. There are a few key differences and considerations due to your dual role as both an employee and a business owner.
As for any other application, lenders may need to see additional documentation relating to the business, alongside the SA302s or tax calculations. They may treat you as self-employed, again, if you own more than 20% to 25% of the company.
How can a mortgage broker help here? Have you got anything else you’d like to add?
A mortgage broker can be incredibly helpful, especially for a company director on PAYE, where income structures can be more complex than for a standard employee.
A broker will understand how director income is assessed and can explain how your business structure affects your mortgage options. We’ll often have access to lenders who are more flexible with self-employed income, to maximise your borrowing potential, whether using PAYE salary and dividends, or using net profit or retained earnings.
We confirm what documentation will be required, and will liaise with your accountant if required to ensure everything is in order. Ultimately, we handle the application process for you, saving you time and unwanted stress.
As an example, I’ve got a current client with a limited company, who needed to maximise his borrowing to move his family to a larger property. He’d been self-employed as a sole trader previously and switched the business to a limited company for tax purposes – so, at that time he only had one year of limited company accounts.
We needed to use his PAYE salary and dividends from the latest year for affordability reasons. I was able to find a specialist lender to accept that, despite the client only having one year trading as a limited company. It proves that those options are out there.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.
For specialist tax advice, please refer to an accountant or tax specialist.