Equity Partner at City Law Firm Secures £1.55m Mortgage on £1.85m Family Home Using LLP Income
An equity partner at a City law firm secured a high-LTV residential mortgage using LLP income, with part interest-only structuring to manage uneven cash flow during a period of elevated family costs.
Client Snapshot
Profession: Equity partner, City law firm
Location: London
Property Type: Family home
Purchase Price: £1,850,000
Mortgage Amount: £1,550,000
Loan-to-Value: 85%
Repayment Structure:
75% LTV interest-only
10% LTV repayment
Income Structure: £480,000 total compensation via LLP drawings
Key Considerations: School fees and higher short-term household costs
Context
The client was purchasing a long-term family home in London. While overall income was strong and expected to increase over time, current household expenditure was relatively high due to school fees and other family commitments.
The priority was to secure the right property now, rather than delaying the purchase, while ensuring the mortgage structure supported short-term cash-flow management without compromising longer-term repayment plans as income rises and costs reduce.
The Challenge
Income was derived through an LLP structure, with remuneration paid via partner drawings rather than conventional PAYE salary. Lender approaches to LLP income vary widely, particularly where:
Income includes retained profits
Drawings fluctuate year to year
Total compensation has increased materially in recent years
In addition, the client required an interest-only element to manage cash flow during a period of higher living costs. At higher loan-to-value levels, many lenders apply stricter limits or require more conservative income treatment.
Without careful lender selection and structuring, borrowing capacity would likely have been constrained or monthly commitments unnecessarily high.
Lender Strategy
Lenders were assessed based on their experience with City law firm partners and their treatment of LLP income, retained profits, and interest-only borrowing at higher LTVs.
Fixed and sustainable elements of partner drawings were identified clearly, with variable components positioned in line with lender policy rather than optimistic projections. Retained profits were addressed carefully to avoid double counting or overly conservative discounting.
A part interest-only structure was used to align monthly commitments with current household costs, while maintaining a clear repayment pathway as income increases and school fees reduce over time.
Several lenders were ruled out early due to rigid LLP income methodologies or inflexible limits on interest-only borrowing.
What We Can Do for You
Structure LLP partner income clearly for lender assessment
Navigate differing lender approaches to retained profits
Use interest-only strategically to manage uneven cash flow
Support high-LTV purchases for established professionals
The Result
A mortgage of £1.55m was secured at 85% loan-to-value, structured with a 75% interest-only element and the remaining balance on repayment.
This allowed the client to purchase a £1.85m family home while keeping monthly commitments aligned with current costs, with flexibility to reduce the interest-only balance as income rises and expenses fall away.
Why This Matters for Similar Clients
Equity partners often assume they must wait until income has fully “settled” or household costs reduce before making a larger purchase. In practice, lender selection and structuring are often more important than timing.
Where income is sustainable and future changes are well understood, mortgages can be structured to reflect both current reality and future capacity.
Request your fee free mortgage consultation today. No obligation, just sound advice.
FAQs
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Approaches vary. Some lenders focus on fixed drawings, while others consider total remuneration and sustainability rather than simple averaging.
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In some cases, yes — but treatment differs by lender and requires careful presentation to avoid double counting.
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Yes. It is often used to manage uneven cash flow, particularly where income is paid periodically or household costs are temporarily higher.
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It can, depending on income stability, firm profile, and lender policy.
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31 Mar - Written By David Walsh
YOUR HOME MAY BE REPOSESSED IF YOU DON’T KEEP UP REPAYMENTS ON YOUR MORTGAGE
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