Can I get a better mortgage deal as a director of a limited company ? or does it not matter.

Nexgenheating

Hello, I am a director of a limited company and I am about to renew my current mortgage that is with NatWest. When I got the mortgage I was in full time employment but now I'm a director.

My question is 

Are all mortgage deals relatively the same whether your a director of a business or in FT employment.

My new potential deal with NatWest is increasing by £450 pm at an interest rate of 5.8% at 2 y fixed.

Any advice or help is appreciated. 

RedFraggle

I'm not sure why it would. Interest rate offered is centred on LTV and credit report and ability to borrow is predominantly about income and risk associated with your current employment position. 

MWT

Nexgenheating said:

Hello, I am a director of a limited company and I am about to renew my current mortgage that is with NatWest. When I got the mortgage I was in full time employment but now I'm a director.

If this is your own company or at least one in which you have a significant ownership then the biggest difference for you this time around is that you will be considered to be self-employed with all that entails.

amnblog

It makes no difference to the rates offered.

Worth noting the 5 year fixed with NatWest as of the 26th start from 5.19% (depending on loan to value and fees). 5 year rates with no fee start at 5.34%

simon_or

With high street banks, everyone has access to the same rates if they meet criteria. From that angle it doesn't matter if you are a salaryman or a Limited Company Director (self-employed as far as a bank is concerned).

From a practical point of view, a salaryman on a permanent contract will find it much easier to tick the boxes required by the bank compared to a Limited Company Director who will have more boxes to tick and things to dig into. Like how long they've been trading, how they take their income from the company, whether they retain any profits within the company, and so on. 

So in practice, often a Limited Company Director may have a smaller choice of banks they can use.

If you're already with NatWest and are only looking at a NatWest switch then all this is moot and doesn't matter. even if you were unemployed and had 10 defaults you'd get the exact same rates as someone with a job and perfect credit.

MWT

Just being a director isn't the problem, it is the company ownership that can cause the issues though...

A salaried director with no shares is still just an employee...

DullGreyGuy

Nexgenheating said:

Hello, I am a director of a limited company and I am about to renew my current mortgage that is with NatWest. When I got the mortgage I was in full time employment but now I'm a director.

My question is 

Are all mortgage deals relatively the same whether your a director of a business or in FT employment.

My new potential deal with NatWest is increasing by £450 pm at an interest rate of 5.8% at 2 y fixed.

Any advice or help is appreciated. 

Exactly the same deals are available irrespective of your job, short of being an employee/director of the mortgage provider

Presumably this is an SME business where you are also a significant shareholder? In which case the rates are the same but getting them is harder as they will treat you as if you were self employed.

Exodi

Nexgenheating said:

Hello, I am a director of a limited company and I am about to renew my current mortgage that is with NatWest. When I got the mortgage I was in full time employment but now I'm a director.

I've got to ask - are you (relatively) young?

I'm the director of a company, and last year we hired an engineering supervisor who was in his early 20s (first job out of uni). He seemed to have an unhealthy obsession with progression, and wanted to be a senior manager yesterday.

He'd often ask me about what it was like being a director to which I'd usually say it's no different to any other job (for clarity - I am not a shareholder, as @MWT says "A salaried director with no shares is still just an employee...). One time he asked whether I mentioned it when making reservations at restaurants (as if that affords some sort of special treatment).

I think social media gives young people an unhealthy obsession with portraying success/wealth.