Getting a Mortgage in a Limited Liability Partnership (LLP)

Yes, it won’t be as simple as if you were in more traditional employment. Mortgage lenders will treat you as being self-employed. So their assessments will differ accordingly – you must provide different income evidence.

You will need to show how the LLP is set up and managed, and things can get even more complicated if you want to buy a property as an investment with your fellow partners.

Either way, it won’t always be straightforward, and you’ll likely require specialist support, so speaking to a broker who specialises in mortgages for LLPs is always recommended.

In essence, these mortgages work the same way as a mortgage for PAYE applicants – and if you’re simply looking to buy a home in a personal capacity, you’ll generally have access to the same products. The main differences come in terms of the assessment process.

Income will be assessed based on your net profit share (as seen in your finalised accounts) or your share of total income received (evidenced via your SA302 self-assessment tax returns).

Mortgage lenders typically use an average of the previous two years’ figures. Still, if your profits or income have massively increased in the last year, some lenders may allow you to borrow against this figure instead. You may also be asked to provide additional clarity over the increase (likewise if there was a decrease).

The income calculations will determine how much you’ll be able to borrow, with income caps always coming into it. Most lenders cap their lending at 3 and 4.5 times your income, though some will go as high as 5 or 6 times, depending on your circumstances.

It’s worth pointing out that some lenders operate slightly differently and may be able to use an internal reference from the partnership in an affordability assessment rather than relying on accounts or tax returns. However, documentary evidence from the LLP’s accountant will still be required.

Try our mortgage calculator below to get a rough idea of your total borrowing. Select ‘Partnership’ from the dropdown menu for ‘Trading style’ to get started.

Limited liability partnership borrowers will also be assessed for a mortgage based on the following criteria…

Many lenders expect self-employed borrowers to have been trading for at least three years, which applies if you’re in a partnership arrangement. However, a lot will accept two years’ accounts, and few will accept applications after you’ve been trading for a year or even less, though they may need to see additional evidence of your experience in the sector and/or previous employment.

You’ll need to provide evidence of the other partners, directors, and shares involved in the business and the nature of the LLP. This is especially the case if the partnership was set up as a special purpose vehicle (SPV) and/or if you want to apply for an investment mortgage in partnership.

If you’re getting a partnership mortgage, any debts the LLP has could impact your eligibility. The same applies if you’re getting a residential mortgage on an individual basis, with your credit score always coming into it. It can still be possible to get an LLP mortgage if you’ve got bad credit, but you’ll likely need to seek specialist lenders and will normally need to put down a higher deposit and pay higher rates.

Deposit requirements will be broadly the same for self-employed borrowers as for PAYE borrowers unless you’re getting a buy-to-let mortgage. However, some lenders will impose a lower maximum loan-to-value (LTV) and, therefore, will ask for a higher deposit, particularly if you haven’t been trading for long.

Other more standard factors can also impact eligibility – as is the case with all mortgages – including the type of property you’re buying (specifically whether it’s of non-standard construction), your age (particularly if you’re heading towards retirement) and your outgoings.