Banks and building societies are gradually increasing the percentage of bonuses they use for mortgage affordability purposes.
Barclays for Intermediaries is the latest lender to raise the amount of bonus income it will accept from 25% to 50% in one of the biggest increases since Clydesdale Bank announced it was taking 60% of bonus income. HSBC is also using 50% of bonuses again after making tough changes at the start of the pandemic.
Santander can take 100% of bonus or commission where the amounts are regular and consistent, or 65% of bonus, commission or overtime paid monthly where the amounts are regular but inconsistent. Accord for Intermediaries is part of the Yorkshire Building Society, and it will accept 60% of sustainable overtime and bonus subject to the cumulative figure not exceeding the basic income.
Kensington for Intermediaries is one of the most generous lenders as it can take up to 100% of regular bonuses, while some of the private banks can also be a good option if you are looking for a £1 million+ mortgage.
Aaron Strutt, product director at Trinity Financial, says: “It has taken a while, but more of the lenders are taking bonuses again, providing borrowers have a record of receiving the payments. Our brokers have access to a range of lenders providing five and 5.5 times salary mortgages to help borrowers secure more generous loans. Many of the lenders offering income stretches do not charge more expensive rates."
While there are more options for borrowers receiving bonuses, some of the biggest banks have still not returned to their pre-pandemic criteria. Halifax previously accepted 60% of bonuses for mortgages but is currently accepting 30% of the payments.
Call Trinity Financial on 020 7016 0790 to secure a more generous bonus income mortgage or book a consultation