Limited liability partnership (LLP) mortgages

We hear from lots of customers who are interested in limited liability partnership (LLP) mortgages. Many of them ready to make an application while others want to know what interest rates they’d qualify for and how UK mortgage lenders assess LLP borrowers.

To answer these questions and more, we’ve put together this comprehensive guide to LLP mortgages.

How do lenders assess limited partnership (LLP) mortgages?

Borrowers who are in a limited liability partnership (LLP) are treated as self-employed by mortgage lenders, so the way they assess your income and how long you will need to have been trading in this capacity for will be different compared to customers in full-time employment.

Self-employed customers have access to all of the same mortgage products as those on PAYE salaries, and are usually offered the same interest rates.

What income can I declare for an LLP mortgage?

Lenders will generally accept your share of the net profit (evidenced by finalised accounts) or your share of the total income received (evidenced with SA302 self-assessment tax returns).

Most mortgage providers will cap the amount they are willing to lend based on 3 – 4.5x your income. Some will go up to x5 and a minority to x6, under the right circumstances.

How long do I need to have been trading for to get an LLP mortgage?

Most mortgage lenders want self-employed borrowers to have been trading in this capacity for at least three years and expect them to be able to produce accounts covering this period. Some lenders, however, will accept two years’ accounts and others will consider self-employed mortgage applications based on 1 year’s accounts.

It may even be possible to find a provider who caters for LLP borrowers with less than 12 months’ track record, under the right circumstances. It can help if you have prior experience in the same industry.

Are there buy to let mortgages for LLP borrowers?

Yes, absolutely. It’s certainly possible to get a buy to let mortgage if you’re in a limited liability partnership, as long as you meet the lender’s eligibility criteria.

Although some lenders won’t offer BTL mortgages to self-employed customers at all, there are providers who are fine with it, even if you only have 1-2 years’ worth of accounts. It may also be possible to find a lender who has no minimum income requirements for a BTL mortgage, basing their lending decision on whether the projected rental income is enough to cover the mortgage.

The only real difference is that BTL mortgages typically come with higher deposit requirements than residential. Certain lenders will ask for as much as 25%, although some accept 15%.

You can find more information about buy-to-let mortgages for self-employed borrowers in our standalone guide.

Can I get an LLP mortgage with bad credit?

The number of approachable lenders will be slimmer if you belong to both the self-employed and bad credit niches, but it may be possible to find a specialist mortgage provider who caters for limited liability partnership borrowers who have adverse on their file.

The advisors we work with can introduce you to specialist bad credit mortgage lenders who are flexible enough to take the age (the older, the better) and severity (a bankruptcy is a bigger deal than a missed phone bill payment, for example) of the credit problems into account.

With this type of niche provider on your side, it may still be possible to find a favourable mortgage deal, despite your credit issues and self-employed status.

For more information about bad credit mortgages, consult our dedicated hub.