First-time buyer secures mortgage using irregular software sales commission

Trinity Financial helped a first-time buyer secure a mortgage after several lenders and brokers struggled to use their irregular commission income.

What did the client do for a living?

Our client worked as a senior specialist in software sales. Although they earned a good income, a significant proportion of their annual earnings came from commission.

Rather than receiving commission every month, the client typically received two or three large payments each year. These payments could range from £20,000 to £30,000 and were clearly evidenced on their payslips and P60.

Why was the mortgage application complex?

Many mortgage lenders assess commission by averaging the payments received over the latest three months. This approach did not accurately reflect our client’s earnings because they could go five or six months without receiving commission before earning a substantial lump sum.

As a result, lenders looking only at the most recent payslips were not including enough of the client’s commission income in their affordability calculations.

The client had already had an offer accepted on a property and was keen to progress, but several lenders and other mortgage brokers had been unable to find a suitable solution.

How did Trinity Financial help?

Our broker reviewed the client’s payslips, P60 and commission history to build a clear picture of their total earnings.

We needed to find a lender prepared to consider commission received over a longer period, rather than relying solely on an average of the latest three months.

Following a recent discussion with a specialist bank about its commission-income criteria, our broker knew it could potentially take a more suitable approach to the client’s earnings.

We presented the full commission history and supporting documentation to the bank, enabling the lender to assess the client’s sustainable income more accurately.

What mortgage did the client secure?

The client secured a capital repayment mortgage with a niche challenger as a first-time buyer.

The mortgage was arranged over a 40-year term on a fixed interest rate of just below 5.05% until 31 October 2028. After the fixed-rate period, the mortgage will move onto the bank’s standard variable rate unless the client switches to another mortgage deal.

The longer mortgage term helped make the monthly repayments more affordable, although it may increase the total amount of interest paid over the full term.

Flexible overpayments using future commission

The mortgage also allows the client to overpay up to 20% of the outstanding mortgage balance each year without incurring an early repayment charge.

This was particularly useful because the client may choose to use some of their future commission payments to reduce the mortgage balance.

Making overpayments could help the client repay the mortgage sooner and reduce the total interest charged, while retaining the flexibility of a longer contractual mortgage term.

The result

Despite being declined elsewhere, our client secured the mortgage needed to proceed with their first property purchase.

This case demonstrates why borrowers with large but irregular bonuses or commission payments can benefit from using an experienced mortgage broker. Different lenders assess variable income in different ways, and choosing a lender whose criteria reflect the applicant’s true earnings can make a significant difference.

Call Trinity Financial on 020 7016 0790 to secure a fixed or tracker rate mortgage, book a consultation, or use our appointment calendar

The information contained within was correct at the time of publication but is subject to change. It is for general information purposes and is not advice.

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