Which banks and building societies are the best for bonus income mortgages?
Page updated 03/02/2025.
Most banks and building societies accept bonus income when determining how much applicants can borrow for mortgage affordability purposes. The percentage of bonus income they accept varies considerably from lender to lender.
Barclays for Intermediaries will use 100% of the two-year average for income multiple purposes. It also does not cap the bonus amount in line with a salary so borrowers can receive higher bonuses than their basic income. This means the lender can issue 5.5 times salary mortgages for single applicants earning over £75,000 or joint applicants earning over £100,000.
It is more common for lenders to use 50% of bonus income. However, some lenders are more flexible, including specialist lenders like Hodge, as they will accept up to 100% of bonuses as an acceptable source of income for an affordability assessment.
How much of a bonus does Santander take for mortgage affordability purposes?
Santander can take 100% of bonus or commission where the amounts are regular and consistent, or 70% 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, which can take up to 100% of regular bonuses. At the same time, some private banks can also be a good option if you want a £1 million+ mortgage.
Aaron Strutt, product director at Trinity Financial, says: “The lenders know that due to the higher mortgage rates and stricter affordability rules, it can be hard to secure a sufficiently large mortgage. This means accepting various variable income sources, like annual or monthly bonuses and commissions.
"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 lenders offer income stretches and do not charge more expensive rates."
What evidence of bonus income would be required by lenders like Halifax?
Halifax is the UK's largest mortgage lender, and its bonus income mortgage criteria states:
Bonus income is acceptable and must represent a regular and sustainable feature of the applicant’s income. Deferred bonuses are usually conditional and may not be guaranteed. Bonuses must not be included on a mortgage application unless they have already been paid out. If the income is received weekly or monthly on the application, it must be stated as earned in the last year.
If bonuses are paid Yearly/Half Yearly/Quarterly – the lower of (a) the total income earned in the last 12 months or (b) the average of the income earned in each of the last 2 years must be stated. All the relevant payslip(s) for the latest 2 years must also be provided.
The payslip must show:
- Applicant & employer name
- Pay date
- Basic income
- Gross & net pay and any additional payments being used for affordability
- On occasions where the customer is unable to provide payslips that fit the listed criteria, Halifax may be able to request an employer’s reference to verify the income.
Call Trinity Financial on 020 7016 0790 to secure a bonus income mortgage or book a consultation
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
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.
Trinity Financial has access to at least 65 lenders offering bonus income mortgages, and they have varying acceptance criteria. According to an analysis by Which? out of 60 lenders they know of:
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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% .
The minimum deposit required to secure a mortgage is 5%. Rates are lower with a 10% deposit.
In order to access the cheapest rates in the mortgage market, borrowers will need a 35% or 40% deposit, although they are not much more expensive if you have a 20% or 25% deposit.
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