Dividend Income Mortgages for Over 55s

Lender assessment of director income falls into three main approaches. Salary plus dividend is the most common: the lender takes your declared salary plus the dividends drawn (averaged over two or three years) as the assessed income. Some lenders use SA302 figures which include both, others use accountant certifications. Retained profits assessment is offered by a smaller group of specialist lenders who will look at the profit remaining in the company after corporation tax, treating this as available income if drawn. This can significantly increase the assessable income for directors who retain profits for tax efficiency rather than drawing everything. Blended approaches combine elements of both.

For over 55s directors, the continuing-trade question matters. Lenders will want to understand whether the company will continue through the mortgage term and how income will be drawn. A director intending to wind down the business within five years has a different conversation from one planning to continue indefinitely. Pension income, if drawn alongside director income, adds another layer to the affordability picture and usually helps the case.

Documentation requirements are more extensive than for employment income. Typically lenders will want two or three years of company accounts, corresponding SA302s and tax year overviews, a current accountant’s reference letter, and bank statements showing the dividend payments. Where the company has been set up recently (for example after a contract role ended and consultancy was incorporated), lenders may want longer trading history than the accounts can provide. In these cases a product transfer with an existing lender may be more accessible than a full remortgage.

Where dividend income is drawn from a company that holds property assets (common among landlords who have moved to a limited company structure), the assessment becomes more complex because the income is partly rental. We walk through this on each case.

The Process

Your first conversation is a relaxed discussion about your company, your income pattern, and the mortgage you need. There is no cost or obligation.

We complete a full fact-find and ask for supporting documentation (accounts, SA302s, tax year overviews, accountant letter). We research the market and come back with a written recommendation.

Every director case is different. A one-person consultancy with stable accounts is a different case from a larger trading company with retained profits and multiple shareholders, and our advice reflects those differences.