Bonus income mortgages

If you receive an annual, quarterly or monthly bonus, it could significantly increase how much you can borrow on a mortgage. Some mortgage lenders accept 50% of bonus income, while others consider 75% or even 100%, depending on your payment history.

Bonus income is particularly important for higher earners working in banking, finance, law, technology and other professions where performance-related pay forms a substantial part of total earnings. They can be especially significant for people whose basic salary represents only part of their annual earnings.

How much bonus income will mortgage lenders accept?

Most lenders require evidence of regular bonus payments, typically covering the previous one or two years.

Mortgage lenders typically accept between 50% and 100% of bonus income when assessing mortgage affordability. Many use 50% to 60% of regular or discretionary bonuses, while others consider 75% to 80%. Some lenders accept up to 100%, particularly where borrowers can demonstrate a consistent payment history.

Most lenders require one or two years of evidence, although criteria vary depending on whether bonuses are guaranteed, annual, quarterly or monthly. Choosing the right lender can significantly increase how much you can borrow.