60 plus mortgage lenders happy to accept bonus income
Some mortgage lenders are much happier to accept bonus income as part of a mortgage application than others.
More than 60 lenders will consider around 50% of a bonus when they determine how much you can borrow, while some will use 100% of regular bonuses.
Halifax for Intermediaries is one of the more generous lenders, as the bank is willing to consider larger bonuses, while Nationwide for Intermediaries can also take 100% of the average amount.
Aaron Strutt, product director at Trinity Financial, says: “Many of our clients receive a bonus as part of their salary, and we regularly use them to help them secure larger mortgage loans. Applications will be easier to place if borrowers have a track record of receiving bonus payments.”
How many lenders accept bonus income for a mortgage?
Trinity Financial's brokers have access to approximately 65 lenders offering bonus income mortgages, and according to research by Which? out of 60 mortgage lenders they surveyed.
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38 lenders accept 100% of guaranteed annual bonuses.
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14 lenders accept up to 50% of guaranteed bonuses.
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For performance-related bonuses, 17 lenders accept 100%, while 32 lenders cap it at 50%.
How much of a bonus will lenders use for mortgage affordability?
For many borrowers, a bonus helps with mortgage affordability and is the difference between getting the required mortgage loan size or not.
Some lenders provide five or 5.5 times salary mortgages, and these help borrowers secure larger loans.
How much of a bonus will lenders use for mortgage affordability?
- Halifax for Intermediaries may accept up to 100% of a bonus, although it may be limited to the same amount as the basic salary if lower. If it is lower, they will ask for proof of a track record of receiving payment.
- Coventry for Intermediaries takes a 50% average of the latest two years’ annual bonus or 50% of the most recent year’s annual bonus figure.
- HSBC for Intermediaries: where overtime, bonuses and other allowances are regular, a maximum of 60% of the average amount received can be considered guaranteed income.
- Metro Bank uses 60% of a cash bonus, commission, and overtime from the latest or current year.
- Kensington for Intermediaries and Investec Private Bank may accept up to 100% of bonus income, provided there is a track record of payments. This is higher than many other lenders in the mortgage market.
Type of Bonus Matters:
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Guaranteed or contractual bonuses (e.g., sales commissions) are more likely to be counted fully.
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Discretionary bonuses are scrutinised more and may be only partially considered.
What lenders typically look for when using bonuses for mortgage purposes:
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Consistency: Bonuses need to be regular and predictable. A one-off or erratic bonus is unlikely to count.
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History: Most lenders want to see at least 2 years of bonus history. Although there are exceptions to this rule. Some lenders accept quarterly bonuses, bonuses paid every six months, annually or when they are performance-related.
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Documentation: You’ll need to provide:
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Payslips showing bonuses.
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Possibly employer confirmation if the bonus is discretionary.
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Call Trinity Financial on 020 7016 0790 to secure a bonus income mortgage, book a consultation, or complete our mortgage questionnaire.
The information contained within was correct at the time of publication but is subject to change.
Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage
Some lenders will accept foreign income and bonuses paid in foreign income for mortgage affordability purposes. However, not all banks and building societies issue foreign-income mortgages.
These currencies UK lenders consider include: Euro, Australian Dollar, Bulgarian Lev, Canadian Dollar, Croatian Kuna, Czech Koruna, Danish Krone, Hungarian Forint, Japanese Yen, New Zealand Dollar, Norwegian Krone, Polish Zloty, Romanian Leu, Singapore Dollar, Swedish Krona, Swiss Franc and United States Dollar.
Mortgage lenders tend to take a "haircut" and take a per centage off of the income to cover themselves in case of currency fluctuations.
Yes, annual bonuses do count towards income for a mortgage. Most lenders will accept 50 or 60 per cent of annual bonuses for mortgage affordability purposes. Some lenders can accept a higher percentage, but this may be through more specialist lenders.
• You can contact one of our consultants by calling 020 7016 0790, or complete our basic enquiry form or mortgage questionnaire for a more detailed initial response.
• You tell us what you are looking for and the property type you want to buy. We assess your mortgage and financial protection needs based on your monthly budget.
• We collect the information and documentation that the lenders and providers need.
• Based on the information supplied, we provide you with illustrations of the most suitable products for your circumstances.
• We then apply on your behalf to secure a mortgage offer as quickly as possible. This is once you have confirmed you are happy to proceed.
• We manage the application through to completion and liaise with all involved parties, including valuers, estate agents, and solicitors.
• Post-completion, we are available for any questions. When you reach the end of your initial product, we can also discuss any further mortgage, will or financial protection product requirements.
As part of our ongoing service commitment, we will contact you at least five months prior to your fixed or tracker rate expiring to ensure you avoid reverting to an expensive standard variable rate.
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