09 Nov Can I get a £2 million mortgage if I own my own business?
How early advice, patience and the right lender helped a London family move closer to the home they wanted.
When a London family wanted to move to a larger home, they had a clear idea of where they needed to live. Schooling and work commitments meant staying within a particular area — and buying there would require a mortgage of more than £2 million.
The difficulty was not simply the size of the loan. The couple earned their income in very different ways, and the company owned by one applicant was still relatively young. Their first conversation with Macon took place around 18 months before they were ready to proceed.
Why was the family’s mortgage more complicated?
One applicant worked in the City, earning a salary plus bonuses. The other was a company director who drew approximately £50,000 a year from the business, with decisions about personal income taken in consultation with their accountant.
For company directors, the amount taken personally does not always tell the full story of how a business is performing. Some lenders assess salary and dividends or other evidenced personal income; others may, under their own criteria, consider an applicant’s share of company profits. Lenders can also differ in how they assess bonus income, trading history and accountant-prepared forecasts.
That does not mean business profits can automatically be used to support a mortgage. It means identifying the right lender — and having the right evidence — can be particularly important.
The first conversation: what was possible then?
Dan Williams, who advises on mortgages at Macon, initially assessed the couple’s circumstances and gave them an indication of the borrowing they might be able to achieve at that point. It fell short of the amount they needed for their intended move.
The company had not yet built up the trading history or level of profit required to support their target borrowing. However, the clients expected the business to perform better than anticipated in the current financial year.
Dan spoke with their accountant, with whom Macon already had an established working relationship. Those discussions indicated that the next set of accounts could show net profits ahead of the original forecast, potentially providing stronger evidence for a future lender assessment.
The answer was not necessarily “no”. It was that the figures did not support the move yet.
Rather than encourage an application before the financial position supported it, Dan explained why the timing mattered and what a prospective lender would be likely to examine. The family could then continue planning with a more realistic understanding of their options.
Keeping the plan in view over 18 months
Dan stayed in periodic contact with the couple and their accountant. These were not conversations about pressing ahead with a mortgage. They were an opportunity to check that the family’s objectives remained the same and to revisit the position as the company developed.
Their priority did not change: they wanted a larger family home in a particular part of London, close enough for schooling and work. Moving to a cheaper area was not necessarily a practical answer.
As the company’s trading history became more established and its financial performance improved, there was a stronger basis on which to consider the mortgage again.
Finding a lender prepared to assess the whole picture
When the couple were ready to proceed, Dan needed to identify a lender comfortable with a mortgage of this size and with the way both applicants earned their income.
That meant understanding which lenders might consider the director’s share of company profits rather than relying only on the income drawn personally, and which could assess the employed applicant’s non-guaranteed bonuses. The lender also considered information and projections prepared by the accountant alongside the company’s record of growth.
Dan drew on his knowledge of lending criteria and established relationships with lender business development managers to identify a suitable lender and understand how best to present the case. Those relationships did not replace the lender’s checks; they helped establish which lending criteria were relevant before the application was submitted.
As part of Macon’s usual process, Dan also completed a detailed fact-find and affordability review covering the couple’s income, expenditure and objectives. Working with their accountant, he brought together the supporting financial information for the lender to assess.
The outcome: a mortgage offer exceeding £2 million
The lender issued a formal mortgage offer for more than £2 million, allowing the family to progress with the purchase of a home in the London area they had been looking in.
At the time of writing, the purchase had not yet completed. The clients were pleased that Dan had identified a lender willing to assess their circumstances, and the established relationship with their accountant helped bring the relevant information together during the process.
What might other business owners take from this?
If you run your own company, the income you choose to draw personally may not be the only financial information a lender can consider. Equally, the fact that a lender cannot offer the borrowing you need today does not mean every lender will assess your circumstances in the same way — or that the position cannot change over time.
Different lenders apply different rules, and a larger loan is never guaranteed or automatically appropriate. For this family, the value of the advice began well before the application: understanding the initial shortfall, keeping their plans under review and approaching a lender when the supporting evidence was stronger.
If you are a business owner thinking about moving home, but are unsure how your income might be assessed, an early conversation with a mortgage adviser can help you understand what may be possible now, what evidence could be needed and whether the timing is right.
Important information
This anonymised case study is for general information and does not constitute personal mortgage or tax advice. Individual circumstances and lender criteria vary. A similar mortgage may not be available or suitable for another applicant. All applications are subject to the lender’s affordability assessment, underwriting and approval. Tax treatment depends on individual circumstances and may change.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Dan Williams
Chartered Financial Planner