---
title: "Remortgage for Business Purposes, Capital for Your Business"
description: "Remortgage for business purposes: lenders that allow it, investing in your company, partnerships, tax bills, second charge business loans and alternatives."
url: "https://mortgagelane.com/mortgages/remortgage-for-business-purposes"
site: "Mortgage Lane"
collection: "mortgages"
date: "2026-10-08"
author: "Joseph Lane"
category: "Mortgages"
reviewed: "2026-10-12"
reading_time: "34 min"
byline: "Joseph Lane"
author_credentials: "CeMAP · FCA authorised firm"
language: "en-GB"
robots: "index,follow"
---

# Remortgage for Business Purposes, Capital for Your Business

Remortgage for business purposes: lenders that allow it, investing in your company, partnerships, tax bills, second charge business loans and alternatives.

Remortgage for business purposes: lenders that allow it, investing in your company, partnerships, tax bills, second charge business loans and alternatives.

[Business purpose loan](https://mortgagelane.com/definitions?term=business-purpose-loan)

Regulation

Credit taken wholly or predominantly for a business the borrower carries on or intends to carry on. Secured on the borrower's home, it is still a regulated mortgage contract unless it is a second charge business loan.

[Read the full definition of Business purpose loan](https://mortgagelane.com/definitions?term=business-purpose-loan)

## Expert advice on a remortgage for business purposes

Speak to a Mortgage Lane adviser about your options.

## In short

Yes, you can remortgage for business purposes with lenders that accept capital raising for a business, such as investing in your company, buying into a partnership or paying a tax bill. The lender assesses the loan on your personal income, not on what the business expects to earn. A remortgage or further advance on your home stays a regulated mortgage whatever the money is for.

## What is a remortgage for business purposes?

**A remortgage for business purposes is a residential [remortgage](https://mortgagelane.com/definitions#def-remortgage), [further advance](https://mortgagelane.com/definitions#def-further-advance) or [second charge](https://mortgagelane.com/definitions#def-second-charge-mortgage) in which some or all of the money raised is used for a business rather than a personal purpose.** It raises money against your home to start a business, invest in your company, buy into a partnership, fund stock or equipment, or pay a business tax bill. You, not the business, are the borrower, so the loan is secured on your home and the lender assesses it on your personal [affordability](https://mortgagelane.com/definitions#def-affordability). Some lenders that accept [capital raising](https://mortgagelane.com/definitions#def-capital-raising) for home improvements do not accept it for a business, because how the money performs depends on the business, while the lender's security is your home.

Lenders that accept a business purpose usually want to see what the money is for, and they need the mortgage to be affordable from your personal income without relying on the business succeeding. Rules made by the [Financial Conduct Authority](https://mortgagelane.com/definitions#def-financial-conduct-authority) (FCA) stop a lender basing its affordability assessment on the equity in the property, so the value of your home sets how much can be secured and your income sets how much can be lent ([FCA Handbook: MCOB 11.6](https://www.handbook.fca.org.uk/handbook/MCOB/11/6.html)). A remortgage or further advance on your home is a [regulated mortgage contract](https://mortgagelane.com/definitions#def-regulated-mortgage) whatever the money is for, and it is arranged and lent under the FCA's conduct rules for mortgages, [MCOB](https://mortgagelane.com/definitions#def-mcob). For a loan to you secured on your home, the one exclusion that turns on a business purpose is a second charge of more than £25,000, explained below.

You can raise the money in three ways, and each one secures it on your home. A remortgage replaces your current mortgage with a larger one, from your current lender or a new one, and leaving a fixed or discounted deal early can mean an [early repayment charge](https://mortgagelane.com/definitions#def-early-repayment-charge). A further advance is extra borrowing from your current lender, and some lenders put it on a separate sub-account at its own rate while the main mortgage keeps its rate. With a second charge, a different lender makes a separate loan secured behind your main mortgage, which is left untouched.

Business finance that keeps the borrowing within the business is the comparison to make first, because it does not use your home as the lender's direct security. If your company borrows against its own premises instead, that is a [commercial mortgage](https://mortgagelane.com/definitions#def-commercial-mortgage), covered on our [commercial mortgages](https://mortgagelane.com/mortgages/commercial-mortgages) page. A loan to a company is outside the regulated mortgage definition because the borrower is not an individual.

Mortgage Lane arranges remortgages and second charges for sole traders, partners and company directors raising money for business purposes: investing in their own company, buying into a partnership, paying [HMRC](https://mortgagelane.com/definitions#def-hm-revenue-and-customs) liabilities, and funding property or equipment. We compare them with commercial and secured business lending. Our page on how to [release equity from your home](https://mortgagelane.com/mortgages/release-equity-from-your-home) covers capital raising for every purpose, and the pages on [remortgaging for home improvements](https://mortgagelane.com/mortgages/remortgage-for-home-improvements), [remortgaging to buy a second property](https://mortgagelane.com/mortgages/remortgage-to-buy-second-property) and [debt consolidation mortgages](https://mortgagelane.com/mortgages/debt-consolidation-mortgages) cover the other common reasons for raising money.

## Remortgage rates for business purposes

**Remortgage rates for business purposes are set by each lender, by product and [loan to value](https://mortgagelane.com/definitions#def-loan-to-value) band, in the same way as for any other remortgage.** Where a lender accepts a remortgage to fund business investment, it can price the loan on its standard remortgage products. Some lenders restrict the amount or the loan to value they allow for a business purpose, and specialist lenders consider cases outside mainstream criteria, with the rate set for those criteria. Product fees vary in the same way, and this page quotes no rate.

Raising money changes the price as well as the size of the loan. On the worked example below, raising £100,000 takes the mortgage on a £450,000 home from 44.4% to 66.7% loan to value, and the rate for the higher band can differ. A further advance on a separate sub-account carries its own rate, and a second charge is priced by its own lender, sometimes above the rate on a remortgage of the whole loan. Leaving a fixed rate early can mean an early repayment charge, which belongs in the comparison alongside the rate. Our [fixed term mortgages](https://mortgagelane.com/mortgages/fixed-term-mortgages) page explains how fixed rates are priced. The comparison should also include business finance, which usually costs more each month over a shorter term.

**Need capital for your business?** Get in touch with what the money is for, your income and your home's value and mortgage. We compare a remortgage with business finance before recommending either.

On a £450,000 home with a £200,000 mortgage, raising £100,000 for the business lifts the loan to value from 44.4% to 66.7%, moving the loan into a higher band where the rate can differ.

## Business purpose capital raising criteria

**Lenders check the same points on every case of capital raising for business purposes, and each lender sets its own limits for them.** The affordability and regulation rows rest on FCA rules and the Regulated Activities Order, checked in October 2026. The [income multiple](https://mortgagelane.com/definitions#def-loan-to-income) and term rows are Mortgage Lane's experience on the cases we arrange. The other rows describe how lenders differ, and the lender's underwriting decides each case. In our experience the standard income multiple is 5 times gross income less credit commitments, or up to 6 times for professionals and specialist products, and residential terms run up to 40 years. The multiple applies to the whole mortgage after the money is raised. A £300 a month car finance payment, for example, takes £3,600 a year off the income before the multiple, which on the worked example below lowers the maximum from £300,000 to £282,000.

The FCA's standard affordability rules require a lender to take full account of your income net of Income Tax and National Insurance, your committed expenditure and your household's essential spending, and to allow for likely interest rate rises over at least five years, unless the rate is fixed for five years or more ([FCA Handbook: MCOB 11.6.5R and 11.6.18R](https://www.handbook.fca.org.uk/handbook/MCOB/11/6.html)). Where a loan is solely for a business purpose, the rules let a lender use an alternative test instead, explained in the regulation section below. If your credit file has problems, our page on a [remortgage with bad credit](https://mortgagelane.com/mortgages/remortgage-with-bad-credit) covers how lenders read them.

## Business purpose capital raising criteria

*Business purpose capital raising criteria*

| Criterion | How it works |
| --- | --- |
| Lender appetite | Some lenders do not lend for business purposes and others accept defined purposes. Which purposes a lender accepts varies by lender and can change. |
| Accepted purposes | Investing in your own company, buying into a partnership, paying a tax liability or buying business assets, as each lender's policy allows. Starting a business is the hardest purpose to place. |
| Evidence of purpose | An explanation of what the money is for, and for larger amounts a business plan, accounts or quotes, as the lender asks. |
| Affordability | Personal income net of Income Tax and National Insurance, credit commitments and household outgoings, with likely interest rate rises allowed for, under FCA rules (MCOB 11.6). The assessment cannot be based on the equity in the home, and lenders assess the income you have rather than what the money is expected to earn. |
| Income multiple | In our experience 5 times gross income less credit commitments, up to 6 times for professionals and specialist products, applied to the whole mortgage. |
| Loan to value | Lenders set their own maximum for capital raising, and some set a lower one where the money is for a business. |
| Amount | Some lenders cap the business element at a set amount or a share of the loan. Limits vary by lender. |
| Term | In our experience residential mortgage terms run up to 40 years. A shorter term raises the monthly payment. |
| Regulation | A remortgage or further advance on your home is a regulated mortgage contract whatever the purpose. A second charge of more than £25,000 taken wholly or predominantly for your business can be a second charge business loan, outside the regulated mortgage rules. |
| Existing deal | An early repayment charge can apply if you leave a fixed or discounted rate early. A further advance or a second charge can leave the current deal in place. |
| Credit | Your personal credit file and, where relevant, the business's credit record are reviewed. |

The affordability row is the standard test in FCA rules MCOB 11.6; for a loan solely for a business purpose, MCOB 11.6.25R lets a lender use an alternative test that can count the business's resources. The regulation row is from the Regulated Activities Order, articles 61 and 61A. Both checked 8 October 2026. The multiple and term rows are Mortgage Lane's experience, not market rules. The other rows describe how lenders vary; each lender's criteria and underwriting decide a case.

## Business purposes lenders consider, and how each is assessed

**Lenders look at what the money will do as well as whether you can afford the mortgage, and the questions they ask depend on the purpose.**

### Investing in your own company

A director may raise money to lend to the company or to buy more shares in it. Lenders want to know how the company will use the money, and the director's personal income must support the mortgage: salary and [dividends](https://mortgagelane.com/definitions#def-dividend-income), or a share of the company's profit at lenders that read it, as our page on [limited company director mortgages](https://mortgagelane.com/mortgages/limited-company-director-mortgages) explains. Money lent to the company is recorded in the [director's loan account](https://mortgagelane.com/definitions#def-directors-loan-account), which is in credit while the company owes the director ([GOV.UK: directors' loans](https://www.gov.uk/directors-loans)); money used to buy shares becomes share capital instead. Which route the money takes can affect tax relief on the interest, covered further down. A lender reading company accounts may also look at the profit left in the business, and our page on [retained profits mortgages](https://mortgagelane.com/mortgages/retained-profits-mortgages) covers the checks behind that figure.

**Get in touch** with the company's accounts and how the money will be used.

### Buying into a partnership

Professionals buying equity in a partnership, such as solicitors, accountants, GPs and vets, can fund the capital contribution by raising money on their home, and some lenders accept a remortgage to buy into a partnership as a purpose. The lender assesses the partner's own income, which is their share of the partnership's profit, and some lenders take account of a new or larger share where the [partnership agreement](https://mortgagelane.com/definitions#def-partnership-agreement) evidences it. A member of a [limited liability partnership](https://mortgagelane.com/definitions#def-limited-liability-partnership) is assessed the same way on their profit share. If the capital is funded with a separate personal loan instead, the lender counts that loan as a credit commitment. Our page on [partnership mortgages](https://mortgagelane.com/mortgages/partnership-mortgages) covers how lenders read a partner's income.

**Get in touch** with the partnership's capital requirement.

### Paying a tax bill

Self-employed people and directors facing a large HMRC liability sometimes remortgage to pay it. The tax owed goes on the application, and lenders look at why the liability arose and whether it will recur. HMRC's own alternative is a payment plan, also called a [Time to Pay arrangement](https://mortgagelane.com/definitions#def-time-to-pay-arrangement): if you cannot pay in full, HMRC may agree instalments after checking that the plan is affordable. Interest runs on what is outstanding, so paying sooner costs less in total ([GOV.UK: if you cannot pay your tax bill on time](https://www.gov.uk/difficulties-paying-hmrc)). Whether a mortgage lender accepts an applicant with a payment plan in place, and on what terms, varies by lender. A remortgage to pay a tax bill turns it into debt secured on your home over the mortgage term, so the two are worth comparing before you choose either. Our page on [sole trader mortgages](https://mortgagelane.com/mortgages/sole-trader-mortgages) explains how tax bills and payments on account show up on a self-employed application.

**Get in touch** with the tax calculation.

### Starting a business

A remortgage to start a business is the hardest case. Lenders cannot rely on income from a business that does not yet exist, so your current income must support the whole mortgage. A remortgage arranged while you are still employed is assessed on that employment, and once you leave it a lender would be reading a new business with no [trading history](https://mortgagelane.com/definitions#def-trading-history). FCA guidance allows a lender to consider projections of future income that form part of a credible business plan for a self-employed customer (MCOB 11.6.9G), but whether a lender does so is its own decision. Our page on [one year self-employed mortgages](https://mortgagelane.com/mortgages/one-year-self-employed-mortgages) covers borrowing once the first year's figures are in. Think carefully about the risk to your home if the business does not succeed. GOV.UK lists public finance and support schemes for new businesses ([GOV.UK: finance and support for your business](https://www.gov.uk/business-finance-support)).

**Get in touch** with your current income and your plan.

### Buying business property or equipment

Equipment, vehicles or business premises can often be financed by asset finance or a commercial mortgage instead, secured on the asset rather than on your home. Asset finance and hire purchase match the term to the asset's working life, so the cost is paid off while the equipment is in use. Premises can be bought with a commercial mortgage, with a [semi-commercial mortgage](https://mortgagelane.com/mortgages/semi-commercial-mortgage) where the building has living space as well, or, for business owners with a pension scheme that can borrow, through the routes on our [SSAS and SIPP mortgages](https://mortgagelane.com/mortgages/ssas-sipp-mortgages) page. Some lenders allow capital raising on the home for business equipment where the borrower prefers it.

**Get in touch** with the asset details.

## Is a remortgage for business purposes regulated?

**A remortgage or further advance secured on your home is a regulated mortgage contract whatever the money is for, so a business purpose on its own does not take it outside the FCA's mortgage rules.** Under article 61 of the Regulated Activities Order, a regulated mortgage contract is credit to an individual or to trustees, secured on land at least 40% of which is used, or intended to be used, as or in connection with a dwelling ([legislation.gov.uk: Regulated Activities Order, article 61](https://www.legislation.gov.uk/uksi/2001/544/article/61)). The FCA's perimeter guidance says the definition contains no reference to the purpose of the loan, and that a business loan to a sole trader secured on their home is a regulated mortgage contract ([FCA Handbook: PERG 4.4](https://www.handbook.fca.org.uk/handbook/PERG/4/4.html)). The lender therefore applies MCOB to it, unless the money is for the purposes of a business with a group annual turnover of £1 million or more, which the rules call a large business customer and leave outside them ([FCA Handbook: MCOB 1.2.3R](https://www.handbook.fca.org.uk/handbook/MCOB/1/2.html)). Some of the rules are adapted for business loans. A lender can use modified disclosure for any loan taken for a business purpose. Where the loan is solely for a business purpose and the lender has reviewed a business plan that gives credible evidence of that (MCOB 1.2.9DR), it can also use an alternative affordability test, which takes full account of the strength of the business's resources where the repayments will come from the business ([FCA Handbook: MCOB 11.6.25R and 11.6.26R](https://www.handbook.fca.org.uk/handbook/MCOB/11/6.html)). These are options the lender chooses; where it does not use them, the standard affordability, advice and disclosure rules apply as they would to any regulated mortgage.

A [business purpose loan](https://mortgagelane.com/definitions#def-business-purpose-loan) made to you as an individual can fall outside regulation only through the exclusions in article 61A, and on a home they are narrow ([legislation.gov.uk: Regulated Activities Order, article 61A](https://www.legislation.gov.uk/uksi/2001/544/article/61A)). An investment property loan is excluded where less than 40% of the land is used, or intended to be used, as a dwelling by the borrower or a [related person](https://mortgagelane.com/definitions#def-related-person), such as a spouse, partner, parent, child or sibling, which rules out the home you live in. That leaves the [second charge business loan](https://mortgagelane.com/definitions#def-second-charge-business-loan), below. Whether a lender offers business purpose second charges at all varies by lender: some keep capital raising for a business within their regulated products, and some lend for a business on a second charge outside them where the conditions are met. A loan made to a limited company is outside the definition altogether, because the borrower is not an individual, so it carries none of the protection of a regulated mortgage even when your home is its security.

These rules come from UK-wide legislation, so they apply in England, Wales, Scotland and Northern Ireland alike. In Scotland the mortgage over a home is a [standard security](https://mortgagelane.com/definitions#def-standard-security) ([legislation.gov.uk: Conveyancing and Feudal Reform (Scotland) Act 1970, section 9](https://www.legislation.gov.uk/ukpga/1970/35/section/9)), and the Order's definition of a mortgage includes it, so a second-ranking standard security is treated in the same way as a second charge.

### Second charge business loans

A second charge business loan is excluded from the regulated mortgage contract definition. It is a loan secured on land that otherwise meets the article 61 tests, where the lender provides credit of more than £25,000, the mortgage ranks behind one or more other mortgages on the land, and the borrower enters into the agreement wholly or predominantly for the purposes of a business they carry on or intend to carry on. Credit of more than £25,000 taken wholly or predominantly for business purposes is also exempt from the consumer credit rules ([legislation.gov.uk: Regulated Activities Order, article 60C](https://www.legislation.gov.uk/uksi/2001/544/article/60C)), so a business second charge over that amount sits outside both regimes. A second charge of £25,000 or less, or one taken mainly for a personal purpose, stays a regulated mortgage contract.

The lender can rely on a [business purpose declaration](https://mortgagelane.com/definitions#def-business-purpose-declaration) in the agreement. Where the declaration states that the agreement is for business purposes, that you will not have the protection and remedies available for a regulated mortgage contract, and that you should take independent legal advice if you are in any doubt about the consequences, the loan is presumed to be for business. The presumption does not apply where the lender, or someone acting for it, knows or has reasonable cause to suspect that the loan is not for business. Signing the declaration means the lender does not have to apply MCOB's affordability and advice rules, and you lose the protections that come with them. Your home is still security for the debt and can be repossessed if you do not keep up the repayments. It is sensible to take independent legal advice before signing a business declaration, and a solicitor can explain what it means for you. Our guide to [second charge mortgages](https://mortgagelane.com/insights/second-charge-mortgages) covers how second charges work in general.

A second charge of more than £25,000 taken wholly or predominantly for a business can sit outside both the regulated mortgage rules and the consumer credit rules, yet the home is still security and can be repossessed if repayments are missed.

## Tax on the interest: sole traders and qualifying loan interest relief

**Interest on borrowing used for a business can be deductible, depending on how the business is structured and how the money is used.** Interest on money used personally is not deductible. Mortgage Lane does not give tax advice. The rules below are from the legislation and HMRC's published guidance, and the business's accountant should confirm the treatment before the money is drawn.

### Sole traders

A sole trader can claim interest on bank and business loans as an allowable business expense, but not the repayments of the loan itself ([GOV.UK: legal and financial costs if you are self-employed](https://www.gov.uk/expenses-if-youre-self-employed/legal-financial)). Where a remortgage is partly for the business and partly personal, only the interest on the part used in the business is a business cost. The deduction lowers [net profit](https://mortgagelane.com/definitions#def-net-profit), which reduces the tax bill and also the income a lender reads from the next tax calculation.

### Directors and partners: qualifying loan interest relief

An individual who borrows to buy ordinary shares in, or lend money to, a [close company](https://mortgagelane.com/definitions#def-close-company) can claim [qualifying loan interest relief](https://mortgagelane.com/definitions#def-qualifying-loan-interest-relief) on the interest. The conditions are that they own more than 5% of the ordinary share capital, on their own or with associates, or hold some shares and work for the greater part of their time in the management and conduct of the company ([GOV.UK: HS340, interest eligible for relief on qualifying loans](https://www.gov.uk/government/publications/interest-and-alternative-finance-payments-eligible-for-relief-on-qualifying-loans-and-alternative-finance-arrangements-hs340-self-assessment-helpshee/hs340-interest-and-alternative-finance-payments-eligible-for-relief-on-qualifying-loans-and-alternative-finance-arrangements-2026)). A close company is one under the control of five or fewer participators, or of participators who are directors ([legislation.gov.uk: Corporation Tax Act 2010, section 439](https://www.legislation.gov.uk/ukpga/2010/4/section/439)), which usually includes a company owned and run by its directors. The company must not be a close investment-holding company, and money lent to it must be used wholly and exclusively for its business ([legislation.gov.uk: Income Tax Act 2007, section 392](https://www.legislation.gov.uk/ukpga/2007/3/section/392)). On the shares route, relief is not given where you or your spouse or civil partner claims Enterprise Investment Scheme relief on the same shares.

Relief is also available on interest on a loan used to buy into a trading or professional partnership, or to contribute capital to or lend to one where the money is used wholly for the partnership's business, and HMRC's helpsheet HS340 covers both routes. You claim the relief on the Self Assessment return, and it counts towards the limit on certain income tax reliefs, which in a tax year is the greater of £50,000 and 25% of adjusted total income ([legislation.gov.uk: Income Tax Act 2007, section 24A](https://www.legislation.gov.uk/ukpga/2007/3/section/24A)). It is not available on overdrafts or credit cards.

Income tax reliefs and business expenses work the same way across the UK. A taxpayer who lives in Scotland pays Scottish Income Tax on wages, pensions and most other taxable income ([GOV.UK: Scottish Income Tax](https://www.gov.uk/scottish-income-tax)), so the same deduction can save a different amount of tax than it would in England, Wales or Northern Ireland, and the accountant works out the figure on the actual return.

## Remortgage or business finance?

**A remortgage usually costs less each month than business finance, but it carries more risk, because the security is your home.** Business finance usually costs more each month over a shorter term but keeps the borrowing within the business, unless you give a [personal guarantee](https://mortgagelane.com/definitions#def-personal-guarantee). The table sets out the general differences between the main routes; each lender sets its own terms.

## Remortgage, second charge or business loan

*Remortgage, second charge or business loan*

| Feature | Remortgage or further advance | Second charge on your home | Secured business loan | Unsecured business loan |
| --- | --- | --- | --- | --- |
| Security | Your home | Your home, behind the first mortgage | Business assets, often with a personal guarantee | Usually a personal guarantee |
| Term | Long | Medium to long | Short to medium | Short |
| Monthly cost | Usually lower | Usually moderate | Usually higher | Usually higher still |
| Home at risk | Yes | Yes | Through a personal guarantee | Through a personal guarantee |
| Assessed on | Personal income | Personal income | Business performance | Business performance |

The general differences between the routes, checked 8 October 2026, not any lender's terms or rates. Each lender sets its own security, term and pricing, and a personal guarantee makes the guarantor personally liable for the debt it covers.

A personal guarantee makes you personally liable for the business debt it covers, so a lender that calls on it can pursue your personal assets, which can include your home. That is how the lender on a business loan can reach your home even though the home is not its direct security. A solicitor can explain what a guarantee commits you to before you sign one.

A second charge can raise business funds without disturbing a low fixed rate on your main mortgage or triggering its early repayment charges. It can be priced higher than a remortgage, and it still puts your home at risk. A further advance from your current lender, where it accepts the purpose, keeps the main mortgage's rate unchanged. For short-term needs secured on business property, [business bridging loans](https://mortgagelane.com/short-term-finance/business-bridging-loans) can fund a purchase, a tax bill or working capital. Property businesses with recurring capital needs can use a [revolving credit facility](https://mortgagelane.com/definitions#def-revolving-credit-facility), covered on our [revolving credit mortgages](https://mortgagelane.com/mortgages/revolving-credit-mortgages) page. Both are business lending, generally outside the regulated mortgage rules where they are not secured on a home the borrower or a related person lives in.

Mortgage Lane compares a remortgage, further advance or second charge with commercial and secured business lending before recommending either. Our [self-employed mortgages](https://mortgagelane.com/mortgages/self-employed-mortgages) page compares how sole traders, partners and directors are assessed, which decides how much personal income each route can rely on.

## How a remortgage for business purposes is arranged

1. **Purpose and amount.** What the money is for, how much is needed and when, and whether any of it is for personal use, because the purpose shapes which lenders and which products fit.
2. **Options compared.** A remortgage, a further advance from your current lender, a second charge and business finance, with any early repayment charge on your current deal and the effect on your monthly payments.
3. **Tax check.** The interest treatment confirmed with your accountant before the money is drawn, including whether the money should reach the company or partnership as a loan or as capital.
4. **Application.** An agreement in principle, then evidence of personal affordability, such as payslips, [SA302](https://mortgagelane.com/definitions#def-sa302) tax calculations or company accounts, and evidence of the purpose, such as a business plan, accounts or quotes for larger amounts, with the lender's valuation of your home.
5. **Completion.** Funds released, the old mortgage repaid or the new charge registered, and any business purpose declaration signed only after independent legal advice.

## Raising £100,000 for the business: the arithmetic

**An illustrative company director with a £450,000 home and a £200,000 mortgage wants £100,000 to invest in the business.** The figures are hypothetical, not a product or an offer. They use 5 times income, the standard multiple in Mortgage Lane's experience, and the illustrative 5.2% rate used across our guides, which is not a product rate, over a 25-year term.

### Step 1. Before and after the remortgage

The director's salary and dividends total £60,000 a year, and there are no other credit commitments. The remortgage moves the loan from 44.4% to 66.7% loan to value, into a higher band, and the director's personal income has to support £300,000, whatever the business does with the money. If the business fails, the £100,000 remains secured on the home.

## Step 1 figures: before and after raising £100,000

*Step 1 figures: before and after raising £100,000*

| Item | Before | After raising £100,000 |
| --- | --- | --- |
| Mortgage | £200,000 | £300,000 |
| Loan to value on a £450,000 home | 44.4% | 66.7% |
| Equity in the home | £250,000 | £150,000 |
| Personal income needed at 5 times, with no other credit commitments | £40,000 | £60,000 |
| Monthly payment at 5.2% over 25 years | £1,192.60 | £1,788.90 |

Illustrative arithmetic on hypothetical figures, worked with the calculator on this page. 5 times is the standard multiple in Mortgage Lane's experience, not a lender term, and 5.2% is not a product rate. Lender limits on capital raising for business purposes may apply. Not an offer of finance.

### Step 2. What the income has to support

The multiple applies to the whole £300,000, not just the £100,000 raised, and credit commitments come off the income first. At 5 times with no commitments, £300,000 needs £60,000 of income, which the director has. A £300 a month car finance payment adds £3,600 a year to the income needed, so on the same £60,000 the maximum falls to £282,000, £18,000 short. A professional at a lender that lends 6 times would need £50,000, or £53,600 with the same car finance.

## Step 2 figures: income needed for a £300,000 mortgage

*Step 2 figures: income needed for a £300,000 mortgage*

| Income multiple | No other credit commitments | With £300 a month car finance |
| --- | --- | --- |
| 5 times | £60,000 | £63,600 |
| 6 times, professionals and specialist products | £50,000 | £53,600 |

Illustrative arithmetic on hypothetical figures, worked with the calculator on this page. Credit commitments come off income before the multiple; 5 and 6 times are Mortgage Lane's experience, not lender terms. Affordability checks can change any figure.

### Step 3. The same £100,000 over a shorter term

Adding the £100,000 to the mortgage spreads it over the mortgage term. The table compares the same sum over 25 years and over 5 years, the kind of term a business loan runs for, at the same illustrative 5.2%, so that only the term changes. A business loan can be priced higher than a mortgage, in which case its true cost would be higher than the 5-year row shows.

## Step 3 figures: £100,000 over 25 years and over 5 years at 5.2%

*Step 3 figures: £100,000 over 25 years and over 5 years at 5.2%*

| Term | Monthly payment | Total interest over the term |
| --- | --- | --- |
| 25 years, added to the mortgage | £596.30 | £78,890 |
| 5 years, a shorter loan | £1,896.30 | £13,778 |

Illustrative arithmetic at the same 5.2% for both terms, which is not a product rate; payments worked with the calculator on this page and total interest as the payments over the term less £100,000. A business loan is usually priced differently. Not an offer of finance.

On these figures the remortgage costs £1,300 a month less than the 5-year loan but £65,112 more in interest if it runs the full 25 years, and the £100,000 stays secured on the home throughout. A secured business loan of the same amount would cost more each month over a shorter term but leave the home outside the lender's direct security, unless you give a personal guarantee.

### What decides the case

Compare the cost and the risk: a remortgage is cheaper each month and riskier for the home, while business finance costs more each month and keeps the risk in the business. Before signing, confirm the tax treatment and the regulatory status, and check that your personal income supports the whole mortgage on its own. Our page on how to release equity from your home compares the routes for raising capital for other purposes, and our [residential mortgages](https://mortgagelane.com/mortgages/residential-property-mortgages) page covers remortgaging in general.

## Related topics

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## More topics in this series

## Business capital raising calculator

The calculator shows the loan to value and equity left after raising money for a business, the most a lender might lend on your personal income, the income the new mortgage needs and the monthly cost. The starting figures are the illustration on this page: a £450,000 home with a £200,000 mortgage, £100,000 to raise and £60,000 of income. Enter your own figures and credit commitments. To compare the amount raised with a business loan, enter a shorter term and rate.

Explore your borrowing

Start again

Enter your figures in pounds. Your estimate updates as you go.

Indicative maximum loan

\-

Enter your figures to see an estimate.

Loan to value

[Discuss your options](https://mortgagelane.com/contact)

Indicative estimate only, subject to lender criteria, affordability and valuation. Lenders set their own policies on lending for business purposes, and some cap the amount, the loan to value or the purposes they accept, which this calculator does not apply; the shorter loan uses the term and rate you enter and is not a quote for business finance. This is not a mortgage offer. Your home may be repossessed if you do not keep up repayments on your mortgage.

## Frequently asked questions about a remortgage for business purposes

**Q: Can I remortgage my home for business purposes?**

faq-id: can-i-remortgage-my-home-for-business-purposes

Yes, you can remortgage your home for business purposes with lenders that allow capital raising for a business, usually for defined purposes such as investing in your own company, buying into a partnership or paying a tax bill. Some lenders restrict or decline it, so the purpose limits which lenders you can use. The lender assesses the loan on your personal income, not on what the business is expected to earn. In our experience the standard maximum is 5 times gross income less credit commitments, or up to 6 times for professionals and specialist products. A remortgage on your home remains a regulated mortgage whatever the money is for, and your home is at risk if you do not keep up the repayments.

**Q: Can I remortgage to invest in my limited company?**

faq-id: can-i-remortgage-to-invest-in-my-limited-company

You can, with lenders that accept investing in your own company as a purpose, provided your personal income supports the whole mortgage and you can explain how the company will use the money. Lenders assess a director on salary and dividends, or on a share of company profit where they read it, not on the return the investment is expected to make. The money can go in as a loan to the company or to buy shares, and either route can attract qualifying loan interest relief where the company is a close company and you meet HMRC's conditions ([GOV.UK: HS340, interest eligible for relief on qualifying loans](https://www.gov.uk/government/publications/interest-and-alternative-finance-payments-eligible-for-relief-on-qualifying-loans-and-alternative-finance-arrangements-hs340-self-assessment-helpshee/hs340-interest-and-alternative-finance-payments-eligible-for-relief-on-qualifying-loans-and-alternative-finance-arrangements-2026)). An accountant can confirm the tax position before the money is drawn.

**Q: Can I remortgage to pay a tax bill?**

faq-id: can-i-remortgage-to-pay-a-tax-bill

Some lenders allow a remortgage to pay a tax bill owed to HM Revenue and Customs (HMRC), and they look at why the liability arose and whether it will recur. The alternative is an HMRC payment plan, which HMRC also calls Time to Pay. Once HMRC has checked the plan is affordable, it spreads the bill over instalments without adding to the mortgage, and it charges interest on the amount outstanding ([GOV.UK: if you cannot pay your tax bill on time](https://www.gov.uk/difficulties-paying-hmrc)). A remortgage turns the bill into debt secured on your home over the mortgage term, so it is worth comparing the total cost of both.

**Q: Can I remortgage to buy into a partnership?**

faq-id: can-i-remortgage-to-buy-into-a-partnership

Some lenders accept remortgaging to fund a partnership capital contribution, particularly in professional partnerships such as law, accountancy and medical practices. The lender assesses affordability on the partner's income, which is their share of the partnership's profit, and some lenders take account of a new profit share where the partnership agreement evidences it. If the capital is funded with a separate personal loan instead, that loan is a credit commitment the lender deducts. Interest on a loan used to buy into a trading or professional partnership, or to put capital into one for its business, can qualify for income tax relief under HMRC's conditions ([GOV.UK: HS340, interest eligible for relief on qualifying loans](https://www.gov.uk/government/publications/interest-and-alternative-finance-payments-eligible-for-relief-on-qualifying-loans-and-alternative-finance-arrangements-hs340-self-assessment-helpshee/hs340-interest-and-alternative-finance-payments-eligible-for-relief-on-qualifying-loans-and-alternative-finance-arrangements-2026)).

**Q: How much can I raise for business purposes?**

faq-id: how-much-can-i-raise-for-business-purposes

The amount depends on your home's value, the lender's loan to value limit for capital raising, any cap it places on money raised for a business, and your personal affordability under the Financial Conduct Authority's (FCA) rules. In our experience the standard maximum is 5 times gross income less credit commitments, or up to 6 times for professionals and specialist products, applied to the whole mortgage and not just the new money. Some lenders limit the business element to a set amount or a proportion of the loan. On a £450,000 home with a £200,000 mortgage, raising £100,000 takes the loan to 66.7% loan to value and needs £60,000 of income at 5 times.

**Q: Can I remortgage to start a new business?**

faq-id: can-i-remortgage-to-start-a-new-business

Remortgaging to start a new business is possible with some lenders, but it is the hardest case, because they cannot rely on income from a business that does not yet exist. Your current income must support the full mortgage, and a remortgage arranged while you are still employed is assessed on that job, so leaving the job changes the assessment. FCA guidance lets a lender consider projected income from a credible business plan for a self-employed customer, but whether a lender does so is its own decision. If the business fails your home is at risk, so weigh a remortgage carefully against finance that keeps the borrowing in the business.

**Q: Is a remortgage for business purposes regulated?**

faq-id: is-a-remortgage-for-business-purposes-regulated

Yes, a remortgage or further advance secured on your home is a regulated mortgage contract whatever the money is for. Under article 61 of the Regulated Activities Order, the test is credit to an individual secured on land at least 40% of which is used as a dwelling, and the FCA's guidance says the purpose of the loan is not part of the definition ([FCA Handbook: PERG 4.4](https://www.handbook.fca.org.uk/handbook/PERG/4/4.html)). The exception is a second charge of more than £25,000, ranking behind your main mortgage and taken wholly or predominantly for a business you carry on or intend to carry on, which is excluded as a second charge business loan.

**Q: Is interest on a business remortgage tax deductible?**

faq-id: is-interest-on-a-business-remortgage-tax-deductible

Interest on borrowing used for a business can be deductible, depending on the structure. A sole trader can claim interest on bank and business loans as a business expense, on the part of the borrowing used in the business ([GOV.UK: legal and financial costs if you are self-employed](https://www.gov.uk/expenses-if-youre-self-employed/legal-financial)). An individual who borrows to buy shares in or lend to a close company, or to buy into a trading or professional partnership, may claim qualifying loan interest relief if HMRC's conditions are met, within the overall limit on certain income tax reliefs. Interest on money used personally is not deductible. An accountant can confirm the position before the money is drawn.

**Q: Is a remortgage cheaper than a business loan?**

faq-id: is-a-remortgage-cheaper-than-a-business-loan

A remortgage usually has a lower interest rate and a longer term than a business loan, so the monthly payments are lower, but it secures the business borrowing on your home. The longer term can also mean more interest in total: at an illustrative 5.2%, which is not a product rate, £100,000 costs £596.30 a month over 25 years, about £78,890 in interest, against £1,896.30 a month over 5 years, about £13,778. A business loan costs more each month but keeps the risk within the business, unless you give a personal guarantee.

**Q: Should I use a second charge for business purposes?**

faq-id: should-i-use-a-second-charge-for-business-purposes

A second charge secured behind your mortgage can raise business funds without disturbing a low fixed rate or triggering early repayment charges on your main mortgage. It can be priced higher than a remortgage and still puts your home at risk. A second charge of more than £25,000 taken wholly or predominantly for your business can be a second charge business loan, outside the regulated mortgage rules. The lender can ask you to sign a business purpose declaration, which it can rely on unless it knows or has reasonable cause to suspect the loan is not for business. Take independent legal advice before signing one. A smaller second charge, or one mainly for personal use, stays regulated.

**Q: What is qualifying loan interest relief?**

faq-id: what-is-qualifying-loan-interest-relief

Qualifying loan interest relief is income tax relief on interest you pay on a loan used for certain purposes, including buying ordinary shares in, or lending to, a close company, and buying into or lending to a trading or professional partnership. For a close company you must own more than 5% of the ordinary share capital, on your own or with associates, or hold some shares and work for the greater part of your time in managing the company. The relief counts towards the limit on certain income tax reliefs, the greater of £50,000 and 25% of adjusted total income ([GOV.UK: HS340, interest eligible for relief on qualifying loans](https://www.gov.uk/government/publications/interest-and-alternative-finance-payments-eligible-for-relief-on-qualifying-loans-and-alternative-finance-arrangements-hs340-self-assessment-helpshee/hs340-interest-and-alternative-finance-payments-eligible-for-relief-on-qualifying-loans-and-alternative-finance-arrangements-2026)). An accountant can confirm whether you qualify.

**Q: Why do some lenders refuse to lend for business purposes?**

faq-id: why-do-some-lenders-refuse-to-lend-for-business-purposes

Some lenders refuse capital raising for business purposes because how the money performs depends on the business, while the lender's security is the borrower's home. Each lender also sets its own policy on which purposes it will lend for, and some keep their residential lending to personal purposes. Others accept defined purposes, such as investing in your own company, buying into a partnership or paying a tax bill, with evidence of how the money will be used and personal income that supports the whole mortgage.

**Q: What is a business purpose declaration?**

faq-id: what-is-a-business-purpose-declaration

A business purpose declaration is a statement in a loan agreement in which the borrower confirms the loan is wholly or predominantly for a business they carry on or intend to carry on. For a second charge of more than £25,000 on your home, a declaration in the form the law sets out lets the lender presume the loan is a second charge business loan, outside the regulated mortgage rules. It also states that you will not have the protection a regulated mortgage gives and that you should take independent legal advice if in doubt ([legislation.gov.uk: Regulated Activities Order, article 61A](https://www.legislation.gov.uk/uksi/2001/544/article/61A)). On a first charge remortgage of your home, a declaration does not remove regulation.

**Q: Do I lose protection if the loan is business-exempt?**

faq-id: do-i-lose-protection-if-the-loan-is-business-exempt

Yes, a loan outside the regulated mortgage rules does not carry the protections of a regulated mortgage, such as the Financial Conduct Authority's (FCA) affordability and advice rules, and a business purpose declaration says so. For a loan to you secured on your home, the only exclusion that turns on a business purpose is a second charge business loan: a second charge of more than £25,000 taken wholly or predominantly for your business. A first charge remortgage or further advance on your home stays regulated whatever the purpose. A loan to your company is not a regulated mortgage contract even if your home is its security. Your home can still be repossessed on an unregulated loan if you do not make the repayments, so take independent legal advice first.

**Q: Can I use a further advance for business purposes?**

faq-id: can-i-use-a-further-advance-for-business-purposes

Some lenders allow existing borrowers a further advance for business purposes, lending the extra on a separate sub-account while the main mortgage keeps its rate. A further advance is assessed on your personal income in the same way as a remortgage, under the Financial Conduct Authority's (FCA) rules, and it is a regulated mortgage contract whatever the purpose. Lender policies on business purposes vary, so the purpose needs checking with the lender first. The rate on the new sub-account can differ from the rate on the existing one.

**Q: Can I remortgage to buy business equipment?**

faq-id: can-i-remortgage-to-buy-business-equipment

Some lenders allow capital raising for business equipment, but asset finance or hire purchase secured on the equipment itself can be more suitable, because it matches the term to the asset's life and keeps the borrowing off your home. Spreading the cost of equipment that lasts a few years over a mortgage term of 25 years or more means paying interest on it long after it has been replaced. An accountant can confirm how the interest is treated for tax.

**Q: What happens if my business fails after I remortgage?**

faq-id: what-happens-if-my-business-fails-after-i-remortgage

If your business fails after you remortgage for business purposes, the mortgage remains secured on your home and must still be repaid from your personal income. Falling behind can lead to repossession, which is why lenders assess affordability without relying on the business. If you are struggling with the payments, speak to your lender early. Free and confidential debt advice is available from MoneyHelper, StepChange, Citizens Advice and National Debtline.

**Q: Do I need a business plan to remortgage for business purposes?**

faq-id: do-i-need-a-business-plan-to-remortgage-for-business-purposes

Lenders often ask for an explanation of how the money will be used, and for larger amounts a business plan, accounts or quotes. Personal affordability remains the main test, but the evidence helps the lender accept the purpose. A director investing in a company may be asked for the company's accounts, a partner for the partnership's capital requirement, and someone paying a tax bill for the tax calculation, though what each lender asks for varies.

**Q: Can a sole trader remortgage for business purposes?**

faq-id: can-a-sole-trader-remortgage-for-business-purposes

A sole trader can remortgage for business purposes with lenders that allow it, and the lender assesses net profit from their Self Assessment tax calculations. The loan is a regulated mortgage contract, because the FCA treats a business loan to a sole trader secured on their home as one. Interest on the part of the borrowing used in the business can be claimed as a business expense ([GOV.UK: legal and financial costs if you are self-employed](https://www.gov.uk/expenses-if-youre-self-employed/legal-financial)), and the sole trader's accountant can confirm it. Claiming it lowers net profit, which is also the income a lender reads on the next application.

**Q: Should I consider commercial finance instead?**

faq-id: should-i-consider-commercial-finance-instead

Commercial finance, such as asset finance, secured business loans, invoice finance or a commercial mortgage on business premises, keeps borrowing within the business and secured on business assets. It suits many purposes better than a remortgage, though usually at a higher monthly cost and over a shorter term. A personal guarantee can still put your home at risk. Mortgage Lane compares a remortgage with commercial and secured business lending before recommending either. GOV.UK lists public finance and support schemes for businesses ([GOV.UK: finance and support for your business](https://www.gov.uk/business-finance-support)).

## Talk it through with an adviser

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Published: 2026-10-08

Last reviewed: 2026-10-12

Source: https://mortgagelane.com/mortgages/remortgage-for-business-purposes