Mortgage lenders accepting one-years' bonus history

by Aaron Strutt

Oct 01 2020

Trinity Financial has access to a range of banks and building societies accepting bonus and commission payments for mortgage affordability purposes.

One building society is accepting the latest year's bonus if it is below £75,000. If it is above £75,000, the lender will require two years history of the bonus being paid. 

Another bank will take up to 60% of the latest years bonus payment and it offers larger mortgage loans.

Aaron Strutt, product director at Trinity Financial, says: “Many of the lenders are happy to take bonus income, but they have very different acceptance criteria. Some will take 50% of a bonus, and they expect proof of two or even three years of payments.

“If your lender is not offering you enough money, or you are looking for a larger mortgage loan, you may get a better deal for a different bank.”

Commission and bonus acceptance criteria:

HSBC for Intermediaries: Where overtime and bonuses are shown to be regular, a maximum of 50% of the average of the last two years can be considered as guaranteed income. If the bonus cannot be confirmed by P60s, the bank will request the relevant payslips or a letter from their employer. 

Halifax for Intermediaries: The bank can accept up to 60% of bonus income. If the bonus is larger than the salary, it is capped at 60%.

NatWest for Intermediaries: The bank can consider up to 100% of the cash element of monthly bonuses providing there is a six-month track record. The income cannot be used as part of the minimum income of £100,000 for interest-only mortgages.  

For discretionary bonuses, the bank will consider an average of the last two years cash bonus and use 50% of it for mortgage affordability purposes. If there has been a sharp decline in the latest year, it is likely 50% of the most recent year’s bonus will be used. The bank will not consider deferred bonuses.

Nationwide for Intermediaries: For annual bonuses and commission – the building society can accept up to 100% of the last two consecutive annual payslips from the current employer showing payment.

Metro Bank for Intermediaries: The bank can accept up to 100% of cash bonuses and commission paid over the last three years. 

Cash bonuses and commission must not exceed 100% of the basic salary. The bank will not allow 100% if there is a downward variance of 20% over the three-year period.

Kensington: The bank can take 50% of bonus income when it is regularly paid and classed as sustainable. It can also consider up to 100% of bonus income for applicants with a strong credit profile.

For help to secure a commission or bonus income mortgage, call Trinity Financial on 020 7016 0790.