Can You Get a Mortgage If You Live Off Investments Rather Than a Salary?
- 4 days ago
- 12 min read
See how lenders convert a portfolio into an income figure, and which gate decides whether that route opens.
Quick Answer
Yes, though often not in the way you would expect. Several lenders convert a pension or investment pot into a fixed percentage of its value, commonly four or five percent a year, rather than assessing the income it actually produces. Your age and the type of wrapper usually decide whether that route opens.
That has an odd consequence. Two people with identical portfolios can be assessed at very different figures, and the difference is a policy number in a criteria document rather than anything about them.
Above a defined threshold the regulator permits a different assessment altogether, one that may take account of net assets rather than income alone. Below it, the ordinary income rules apply however large the portfolio is.
Reviewed by Ben Stephenson, FCA authorised (FRN 496907) · 25+ years' experience · 4.9★ on Google. Updated: 20 August 2026.
Who Is This Guide For
Best for people living on portfolio income rather than a salary, early retirees with substantial pension pots, and anyone whose earned income has stopped but whose capital has not, who has been told that no payslip means no mortgage.
Key Points
Lenders may credit 4% or 5% of the pot as income
Both published rates are gated on being 55 or over
Drawing less can score better than drawing more
Table of Contents
The lender may not be looking at your income at all
Most people in this position expect a conversation about dividends and interest. Will the lender accept them, over how many years, and with what haircut.
For the lenders that have a real route, that is usually the wrong conversation.
What several of them actually do is convert the pot into a deemed income. They take the value of the fund and credit you with a fixed percentage of it per year, regardless of what the investments are paying. One society's published criteria use four percent. Another uses five.
On a one million pound pot that is forty thousand pounds of assessable income at one and fifty thousand at the other. The portfolio is identical. The difference is a number in a criteria document. Where portfolio cases fit alongside other awkward income types is set out on our specialist mortgages hub.
At a typical income multiple, that one percentage point of difference is worth tens of thousands of pounds of borrowing before any other criteria are considered. It is not a judgement about you or your investments. It is a policy setting.
What is being tested is the pot, not the payments
Once you see the mechanism, several confusing things fall into place.
If the lender is applying a percentage to a capital value, then the actual yield of your portfolio is not the input. A cautious portfolio yielding two percent and a higher yielding one paying five can produce the same assessed figure, because the assessment never looks at the distributions.
That cuts both ways. It is generous to anyone whose portfolio is invested for growth rather than income, and unhelpful to anyone who has deliberately built a high yielding portfolio precisely so they could live off it.
It also means the question is not really whether a lender accepts investment income. It is whether a lender has a published conversion rate, and whether you qualify to use it.
That reframing is worth holding onto, because it explains the pattern of declines people in this position collect. A lender without a conversion mechanism is not rejecting your portfolio on its merits. It has no field to put it in.
Nothing here is advice about investments. We are mortgage brokers, not investment advisers, and nothing in this article is a suggestion to hold, sell, move or restructure anything. What we can describe is the arithmetic lenders publish and apply.
Two gates decide it, and neither is about how much you have
The first gate is age. Both of the published rates found in this research are available only from age fifty five, and both say so explicitly.
That threshold is borrowed rather than invented. It is the age at which pension savings generally become accessible, so a lender applying a percentage to a pot is relying on the money being reachable. Applied to a mortgage assessment, the effect is a hard line rather than a sliding scale.
The second gate is the wrapper. At one society the four percent conversion applies to pension pots generally, and separately to investment portfolios, stocks and shares and cash ISAs, but for the latter only where the borrowing runs into retirement. At the other, the published table of acceptable income lists pension pots and does not carry a general investment portfolio line at all.
Applicant | Likely assessed position |
Aged 56, one and a half million in a pension, drawing nothing | A substantial deemed income under a published rate |
Aged 54, one and a half million in a general investment account | Frequently nothing, under either published rate |
Aged 60, portfolio outside a pension, borrowing into retirement | May qualify at one society, not at the other |
Aged 45, large portfolio, mortgage term ending well before retirement | Usually outside both published routes entirely |
So a fifty four year old living comfortably on the natural yield of a substantial portfolio can be assessed at nothing by both, while someone two years older with the same money inside a pension and drawing none of it is assessed at a large figure. The money is the same. The gates are not.
There is a certain logic to it from the lender's side. A pension pot from age fifty five is accessible, its value is verifiable and its treatment is standardised, which makes a formula defensible. A general investment account is none of those things in the same way. That does not make the outcome feel less arbitrary if you are on the wrong side of it.
Drawing less can put you in a better position
This is the line that surprises everyone, and it is published in plain terms.
At one society, a customer who is not drawing anything from a pension pot can still have four percent of its value credited as income, provided they are over fifty five. No further test.
A customer already drawing at a higher rate can use that actual figure, but only if the pot can be shown to support that level of withdrawal across the whole mortgage term. That is an additional test which the first customer never has to pass.
The result runs opposite to everything people learn about earned income, where a bigger number is always better. Here, the person taking less can be in the easier position, because the lender's concern is durability rather than size.
Practically, that means the shape of your current drawings is worth establishing before an application rather than during one. It also means an assumption that taking more income will improve the outcome may be exactly wrong.
A worked example, and the two years that changed the answer
Consider an illustrative composite. A couple, one aged fifty three and one aged fifty seven, with around one and a quarter million pounds between them, most of it in pensions and the rest in a general investment account. No employment income. They wanted three hundred thousand pounds against a nine hundred thousand pound house.
The first approaches went nowhere, and the reason given was that they had no income. In affordability terms that was almost accurate, because the lenders approached had no published mechanism for turning a pot into a figure.
With a lender that publishes a conversion rate, the position looked entirely different. The older applicant's pension qualified on age, the deemed income was calculated from the fund value rather than from distributions, and the case became straightforward. The younger applicant's pension contributed nothing to the assessment, and the general investment account contributed nothing either. Those amounts are illustrative, and published criteria vary considerably.
The lesson is that this is a placement problem wearing the costume of an eligibility problem.
It is worth adding what did not work, because the instinct is understandable. Producing more evidence of the couple's actual investment income made no difference at the first lenders, since the obstacle was the absence of any mechanism rather than any doubt about the money.
The threshold where the rulebook itself changes
There is a second route, and it is worth knowing exists even though most people will not reach it.
Ordinarily a lender must assess affordability on income, net of income tax and national insurance, against committed and essential expenditure. That is the standard rule and it is why a large portfolio with no income can be an awkward case (FCA, MCOB 11.6.5R).
For a customer who meets the regulator's definition of a high net worth mortgage customer, a lender may instead apply a different set of provisions which permit it to take account of income or net assets or both (FCA, MCOB 11.6.33R and 11.6.34R). The definition is an annual net income of at least three hundred thousand pounds or net assets of at least three million pounds (FCA Handbook Glossary).
That is why private banks and some specialist lenders talk about lending against assets rather than income, and why the figures they quote as entry points are the ones they are. The threshold is not marketing. It is the point at which the rules permit a different conversation.
Below it, the ordinary income rules apply no matter how large the portfolio is, which is the single most common source of frustration for people in this position.
It also explains something that otherwise looks like snobbery. When a private bank quotes a minimum, it is usually quoting the regulatory threshold rather than inventing one. Below that line it would have to assess the case the same way any other lender does.
Natural income, drawdown, and what the file needs
Where a lender is assessing actual income rather than applying a rate, one distinction dominates.
Natural income means the dividends, interest and distributions the portfolio actually pays out. Capital drawdown means selling units to live on. Lenders are generally far more comfortable with the first than the second, because one leaves the capital intact and the other consumes it. Where actual income is used, expect the durability question to be asked directly.
People living on a portfolio frequently do both, taking the distributions and topping up by selling a little, and the two arrive in the same bank account looking identical. Separating them clearly in the file saves an argument later.
Evidence tends to be portfolio or fund valuations, dividend vouchers and consolidated tax certificates, tax calculations, and bank statements showing the money actually arriving. History requirements found in this research were shorter than the two or three years commonly claimed online, ranging from a few months to two years, and several lenders effectively want a valuation rather than a history at all, because a valuation is what the percentage is applied to.
That last point is worth flagging because it contradicts most guidance on the subject. If the assessment is a percentage of value, then a long history of distributions proves something the lender is not asking about. Producing three years of dividend vouchers for a lender that wants a current valuation is effort spent in the wrong direction.
If the borrowing runs past normal retirement age, the assessment sits alongside the wider question of lending in later life, which our guide to age limits and whose age counts approaches from a different angle. Where a portfolio is offered as the repayment strategy on an interest only basis, our guide to minimum income on interest only sets out the constraints that apply.
The hidden costs and frictions
Some of these are financial and some are simply time.
Valuations of a portfolio have to be current, and a valuation obtained early in a slow purchase may need refreshing before completion. Where a fund manager or provider has to produce a statement in a particular form, that can take longer than anyone allows for.
Market movement adds a wrinkle nobody enjoys. If the assessed income is a percentage of value, then a fall in the portfolio between application and offer reduces the assessed income with it. Building a little headroom into the borrowing figure is prudent for that reason alone.
Where deposit funds are being released from investments, the source of funds trail needs to be legible from sale to solicitor. It is rarely a single transfer, and our guide on large deposits covers what underwriters look for. Selling assets to fund a deposit can also have consequences we are not qualified to comment on, which is a conversation for your own adviser well before completion.
The larger cost is usually the wrong route. Applying to lenders with no published mechanism produces declines that say you have no income, which is both dispiriting and inaccurate, and each one may leave a search footprint. Establishing which lenders publish a rate, and whether you pass the age and wrapper gates, costs nothing and takes an afternoon.
Where this leaves you
The honest summary is that living on investments is not an obstacle so much as a sorting mechanism.
If you are over fifty five with a substantial pension pot, there is a published route with published arithmetic, and your actual drawings may matter less than you expect. If you are younger, or the money sits outside a pension and the term ends before retirement, the mainstream published routes are likely to be closed and the conversation moves to specialist and private lending.
If your position is genuinely at the scale where the regulator permits an asset based assessment, that is a different market again, with different lenders and a different process.
Between those cases sits a middle group that is harder to generalise about: substantial but not enormous portfolios, held partly inside and partly outside pensions, with a term that straddles retirement. Those cases turn on detail and are worth taking advice on rather than guessing at.
None of these routes is discoverable from a rate table, which is the frustrating part. They sit in criteria documents. Our self-employed mortgages guide covers the neighbouring problem of income that exists but is awkward to evidence, and the common thread is the same: the question is almost never whether it is possible, but which lender's published rules were written with your shape of case in mind.
FAQs
Can I get a mortgage with no salary if I have a large portfolio?
Often yes, but the route matters more than the size of the portfolio. Several lenders will credit you with a fixed percentage of a pension pot as income, typically four or five percent, provided you are over fifty five. Outside those published routes a large portfolio can still be assessed at nothing.
Do lenders look at what my investments actually pay me?
Sometimes, but the mainstream published mechanism does not. It applies a percentage to the capital value instead, so the yield of your portfolio is not the input. Where a lender does assess actual income, it distinguishes sharply between distributions received and capital sold to live on.
Why does my age matter so much?
Both published conversion rates found in this research are available only from age fifty five, which is a pension access threshold rather than a lending one. Below that age, and outside a pension wrapper, the mainstream routes generally do not open regardless of how much money is involved.
Is it better to be drawing an income from my pension before applying?
Not necessarily, and one lender's published criteria suggest the opposite. A customer drawing nothing can have a set percentage credited without further test, while one drawing at a higher rate must additionally show the pot sustains that withdrawal across the term. We cannot advise on drawdown decisions, which are a matter for a qualified adviser.
What is a high net worth mortgage customer?
It is a defined term in the regulator's handbook, meaning annual net income of at least three hundred thousand pounds or net assets of at least three million. Above that threshold a lender may assess affordability using net assets as well as income, which is the basis of most asset based lending propositions.
Summary
Living on investments rather than a salary does not close the mortgage market, but it changes what is being assessed. The lenders with a real route generally convert a pot into a fixed percentage of its value rather than looking at what it pays you, and whether that route opens depends on your age and the wrapper the money sits in rather than the amount. Above a defined regulatory threshold a different assessment becomes available. Below it, the ordinary income rules apply however large the portfolio. Finding the lender whose published arithmetic fits your position is the whole exercise.
Updated: 20 August 2026
Written by Ben Stephenson, CeMAP-qualified Mortgage Broker.
Manor Mortgages Direct is FCA authorised, FRN 496907, has traded for 25 years, is highly positively reviewed, 4.9 rated on Google, and has helped thousands secure the right mortgage. Bristol-based mortgage brokers, assisting clients nationwide.
Sources
FCA Handbook, MCOB 11.6.5R, affordability assessment - https://www.handbook.fca.org.uk/handbook/MCOB/11/6.html - accessed 18 August 2026
FCA Handbook, MCOB 11.6.33R and 11.6.34R, high net worth mortgage customers - https://www.handbook.fca.org.uk/handbook/MCOB/11/6.html - accessed 18 August 2026
FCA Handbook Glossary, high net worth mortgage customer - https://www.handbook.fca.org.uk/handbook/glossary/G2953.html - accessed 18 August 2026
Skipton for Intermediaries, A-Z lending criteria, residential - https://www.skipton-intermediaries.co.uk/criteria/a-z-lending-criteria/a-z-lending-criteria-residential - accessed 18 August 2026
Furness Building Society, intermediaries lending criteria - https://www.furnessbs.co.uk/intermediaries/lending-criteria/ - accessed 18 August 2026
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