Mortgage offer calculated on dividends

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Anyone had any experience of obtaining a mortgage offer when the bulk of income is dividend? I'd like to guess how much we could borrow but most calculators work on salary

Hi, our mortgage last year was made up of my part time salary and my husbands company director salary which is around 40% dividends, I struggled to get any idea online with calculators so went through a mortgage broker in the end, you can call and have a nine obligatory chat and they'll tell you the ball park of what you can borrow, at the time we were only thinking of moving but after finding out what we could borrow we ended up doing it! The mortgage broker we used said Santander tend to look favourably on self employed/, dividend set ups and they only look at last two years not 3 like some asking as it's an increase in wage, so they ended up being the ones we went with, so if I were you, I'd contact a broker and just see!

Yes will definitely do that thank you. Can I be nosey and ask if you add up you total take home pay in the year, what you would multiply it by to get to the amount offered?

Speak to a good, independent, mortgage adviser.

Some mortgage providers only look at your actual dividends drawn, rather than looking at your and your company as a whole.

Many people take only what they need out of their companies to minimise their personal taxes, but this has the problem of compromising how much a mortgage lender might be willing to offer, even if you had the capacity to earn more (i.e. your company earned £100,000 in profits, but you only took £50,000. They'd base the affordability on £50,000 only, even though if you had a bigger mortgage you'd have drawn more money).

Drives me mad that some mortgage providers just can't understand it, but there are some that will consider the company's undrawn profits also. A good mortgage broker will point you in the right direction. Ask friends/family/accountant for recommendations.

Nationwide take dividends into account, provided you can provide 2 full years accounts.

If you use their on line affordability calculator, select director/shareholder >20%
And then enter salary plus dividends for the last 2 tax years.
This is assuming that you have more than 20% share in the company.

Meant to add, there is no “income multiplier”, it uses affordability based on a number of factors.

Just tried the nationwide calculator, that's perfect thank you!

Good stuff, glad I could help