Can I get a mortgage with an LLP?
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Can I get a mortgage with an LLP?
Charlie Huxley explains how to go about getting a mortgage as a partner in a Limited Liability Partnership (LLP).
What is a limited liability partnership (LLP)? Can you get a mortgage in an LLP?
A limited liability partnership is a business structure. It sits somewhere between a traditional partnership and a limited company. You’ve got two or more partners, and you share the profits, but your personal liability is limited. That means if the business runs into trouble, your personal assets are generally protected. You can get a mortgage if you are set up this way, but it’s a little bit more complex. Most lenders assess it as if you were self-employed. If you’ve got your tax calculations and tax year overviews, lenders will use those to calculate how much you can borrow.Can a newly established LLP apply for a mortgage? Can I get a mortgage if I’ve only been in an LLP for a year?
If your LLP has only been trading for a year, some lenders will say no straight away. Most high street banks want two years of accounts because that’s their comfort zone. They want to see continuous stability in the business. However, other lenders will consider just one year. If you’ve just moved from being a sole trader or a limited company director into an LLP and the work hasn’t really changed, that’s usually fine. If it’s a brand new venture with no track record at all, you can expect fewer options and quite tight criteria. With one year, you could get a mortgage, but it narrows the pool of lenders available.How are LLP mortgages assessed by lenders? What mortgage criteria does an LLP need to meet?
To calculate your income, most lenders would look at your two years’ tax calculations and tax year-overviews, which show your personal income. Lenders want to see stability and consistency. If your income is sustainable, they will be comfortable and happy to lend.What documentation will lenders want to see as an LLP?
They’ll want to see all your standard documents, such as your proof of ID, proof of address, bank statements and your credit report. Something slightly different with a limited liability partnership is that they’ll want your last two years’ tax calculations and tax year overviews. They’ll also require a recent partnership bank statement to make sure the funds are there, and the business isn’t running at a loss.How much can an LLP borrow? Is there a cap on this? How much deposit is needed?
Some lenders still allow you to put down a 5% deposit for a limited liability partnership mortgage. On the borrowing amount, every situation is completely different. It depends on the deposit you have, how many children or other dependents you’ve got, your financial commitments, and also how much your partner earns. Most lenders cap the borrowing at 4.5 times your annual salary, but if you’ve got a bigger deposit or you earn over a certain amount, some lenders will go up to six times. It really depends on your situation.SPEAK TO AN EXPERT
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Can an LLP with company debt apply for a mortgage? What happens if I have bad credit as an LLP partner?
You can apply, but the debt matters. If it’s normal trading debt – like a business loan or overdraft – and it’s being serviced comfortably, most lenders won’t panic at all. They’ll look at the accounts, check profitability and assess whether the debt is manageable. With the right sort of debt, it won’t matter.
Can I get a Buy-to-Let mortgage as an LLP?
Yes, you can get a Buy-to-Let mortgage as an LLP, but there are two routes, and they’re quite different. In both cases, the minimum deposit tends to be 25%.
Route one is to apply personally as an LLP partner. In that case, lenders assess your share of the LLP’s profit as income. The rental income then needs to stack up under the lender’s stress tests.
Route two is where the property is bought in the LLP’s name. This is more specialist lending, and there are fewer options. Lenders will assess the rental income first and then look at the LLP’s accounts. Usually, they also require a personal guarantee from the partners of the LLP.
How does remortgaging work as an LLP? Are there any differences?
It’s the same process as when purchasing a property. You still need the same documentation – all your income documents and credit report. That won’t change whether it’s a purchase or a remortgage.
My advice is to be organised and start the remortgage process at least six months before your current deal ends. That gives you enough time to get a new deal locked in and avoid going onto your current bank’s standard variable rate.
Can I get a mortgage as an LLP if I have bad credit?
You can, but it won’t be treated the same as a clean case. Lenders don’t assess the LLP’s credit file for a residential mortgage; they’ll assess yours. If you’ve got missed payments, defaults, or county court judgements, it really can affect whether you can get the mortgage or not.
How can a mortgage broker help? Have you got any final thoughts?
The income that’s derived if you work in an LLP is non-standard, so lenders may treat it differently. Some use your salary plus your share of profit. Some are more flexible on whether you’ve got one or two years’ accounts.
A broker just knows where to get you the most suitable mortgage. We’ll go straight to the lender that fits your structure. The value isn’t just in getting access to the lenders and the most suitable rates; it’s also about the strategy and getting it right, the first time.
Key Takeaways:
- Most lenders assess an LLP partner as if they were self-employed. Lenders will use the partner’s last two years’ tax calculations and tax year overviews, which show personal income, to calculate the borrowing amount, looking for stability and consistency.
- While most high street banks require two years of LLP accounts for stability, some lenders will consider applicants with only one year of trading history, especially if they transitioned from a sole trader or limited company. Brand new ventures without a track record will face tighter criteria and fewer options.
- In addition to standard documents (ID, proof of address, bank statements, credit report), lenders specifically require an LLP partner’s last two years’ tax calculations and tax year overviews, as well as a recent partnership bank statement to ensure the business is not running at a loss.
- The borrowing amount depends on individual circumstances, but most lenders cap borrowing at 4.5 times the annual salary. However, some lenders may extend this up to six times if the applicant has a larger deposit or earns over a certain amount, and a deposit as low as 5% may still be allowed.
- Lenders focus on the LLP partner’s personal credit file for a residential mortgage, not the LLP’s credit file. While manageable trading debt won’t necessarily be an issue, personal bad credit—such as missed payments, defaults, or county court judgements—can significantly affect mortgage eligibility.
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.