Complex Income Types And Mortgages

Getting a mortgage when you have a complex or non-standard income can be tricky, an expert mortgage broker can help you with your mortgage application.

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Home Income Types Complex Income Types And Mortgages
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Updated: March 15, 2024

In this article, we’ll explain how to get a mortgage with complex or non-standard income, how much you might be able to afford to borrow, and why working with a broker can increase your chances of success.

What counts as complex income?

Complex income can be any type that isn’t from a full-time salaried job where these earnings can be proved by simply providing a mortgage lender with copies of your most recent payslips.

Income from any type of self-employment, freelance role or investment portfolio, for example, cannot be consistent nor guaranteed and, therefore, is seen as being riskier – or more complex – in the eyes of a lender.

As a result, someone applying for a mortgage who falls into these categories will need to provide other forms of documentary evidence in order to secure the borrowing they need.

Can you get a mortgage with a complex income?

Yes, it’s possible. Your income is one of the most important aspects of a mortgage application as lenders will use it in their affordability calculations to work out how much you can afford to borrow. If you have complex finances you risk some or potentially all of this income being discounted or overlooked by lenders, especially if they are using basic approval processes rather than looking at your application on an individual basis.

However, with the right support from a broker who has a thorough understanding of your finances, there’s no reason why having a non-standard income should automatically mean you can’t get a mortgage.

Why is it harder to get a mortgage with a complex income?

The extra difficulty is mainly down to being able to prove to a mortgage lender how stable your income source is if it’s not from a stable, employed role.

The other aspect is finding the right mortgage lenders who would look more favourably on someone applying for a mortgage with a complex income.

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What types of income can you use for a mortgage?

When it comes to your income, a lender essentially wants answers to two questions – Is your income enough that you can afford your mortgage repayments every month and is it secure, or as secure as possible, for the term of the loan or the foreseeable future at least?

You don’t necessarily need a regular full-time income from employment to satisfy a lender on both of these points, so if your situation is a little more complicated than that then keep reading, as we look at the different types of income you can use for a mortgage.

Self-employment

Income from self-employment tends to be seen as a little higher risk than employment as it’s normally more variable and therefore harder to predict.

If you are self-employed, most lenders prefer to see a minimum of three years’ accounts or tax returns, although there are some who will consider applications backed by two years’ records, 12 months, or sometimes even less.

Contractors

Working in a similar way to self-employed freelancers, contractors tend to have larger, longer pieces of work in place with individual companies. Income from contract work is normally accepted for a mortgage as long as you can evidence the value and duration.

Contractors should expect to be asked to provide details of contracts and to be able to show a good track record and a current contract, often with a specified minimum term left to run.

Temp workers or zero-hours contracts

This type of income can be a little harder to work with as it’s more difficult to convince lenders that the income is regular and reliable. One way to do this is to show regular hours worked historically through payslips and bank statements. Although your pool of potential lenders here will be smaller, a good specialist broker will know the right ones to approach.

We also have a guide to mortgages for temp workers and those on zero-hour contracts which you may find useful.

Investment Income

Income from investments, including trust fund income or a share portfolio, can be considered as income for the purposes of a mortgage by most lenders, although some may treat it differently to others so a broker will be useful here in determining which lender you should apply to to maximise the amount you can borrow. Eligibility criteria will be focussed on the sustainability and performance of your investments, and lenders will likely want to see evidence of this through tax returns or portfolio statements.

Income from dividends

Many company directors choose, for tax reasons, to pay themselves a relatively low salary and to make that up with dividend payments. The low basic salary doesn’t mean you have to miss out on a mortgage though – many lenders will count dividend payments as income.

Apprenticeship income

The main difficulty with using an apprenticeship wage is that although it counts as income for a mortgage, it’s usually very low and therefore the amount you can borrow is likely to be severely restricted. There may be ways to work around this though. If you have a family prepared to support a mortgage application then a guarantor mortgage or a family offset mortgage could be options, or you could look at shared ownership, where the deposit and income requirements will be much lower.

Bursary income

NHS bursary income is considered by some lenders and will depend on factors such as the amount, how long the bursary has to run, and your job prospects after your training is complete. Remember too that NHS workers can also be considered for professional mortgages, along with other jobs such as teachers and solicitors, which may qualify you for higher income multiples and preferential terms.

Income from benefits

A lot of people worry that unless you have specifically earned your income, it won’t count towards mortgage affordability calculations, but there are actually many government benefits that count towards your income for the purposes of a mortgage assessment. We have a detailed article on mortgages and benefits, including a list of typically eligible benefits.

Maintenance payments

Any child maintenance payments made by an ex-partner could be eligible to count as income for the purposes of a single-parent mortgage. You’ll need to be able to show that payments are reliable and regular, normally through a court order or CMS letter, although private arrangements are accepted by some letters subject to bank statement evidence. If your children are nearly adults and maintenance payments are likely to stop soon then this could make it less likely that they’ll be included.

What types of income will lenders not accept?

There will of course be certain types of income, such as a salary paid cash in hand or income from professional gambling, that are going to be deemed unacceptable by a significant proportion of lenders. Even in these instances, there will likely be some who are prepared to make an exception.

The simplest thing to do is to disclose all possible sources of income to your broker, then they can work out which are likely to be considered by which lenders.

How much can you borrow?

Mortgage lenders tend to use a multiple of someone’s annual income as a guide to what they can borrow, typically 4-4.5 times this amount. So, for example, if you earn £30,000 per year then working on a multiple of 4.5 this means you could be able to borrow up to £135,000 for a mortgage.

Having a variable or non-standard income makes it harder to get a clear idea of how much you might be able to borrow but it is possible to get a rough guide with our mortgage affordability calculator.

You’ll need to have an estimate of your total income from allowable sources, keep in mind that these figures are for illustration purposes only. Your broker will be able to give you a much more accurate figure once they’ve looked in more detail at your income and researched lender options.

Mortgage Affordability Calculator

Use this calculator to determine how much you could potentially borrow for a mortgage, based on the typical salary multiples used by most UK lenders.

Input full salaries for all applicants
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Your Results:

You could borrow up to 

Most lenders would consider letting you borrow

This is based on 4.5 times your household income, the standard calculation used by the majority of mortgage providers. To borrow more than this, you will need to use a mortgage broker to access specialist lenders.

Some lenders would consider letting you borrow

This is based on 5 times your household income, a salary multiple you might struggle to qualify for without the help of a broker. This income multiple is not widely available to customers who are applying directly with a lender.

A minority of lenders would consider letting you borrow

This is based on 6 times your household income, a salary multiple you will struggle to get without a broker. Six-times salary mortgages are usually only available under very specific circumstances.

Get Started with an expert broker to find out exactly how much you could borrow.

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How to get a mortgage with a complex income

Your first step should be to find a mortgage broker who specialises in complex income. Make an enquiry with us and we will match you with an advisor who has these credentials.

The mortgage broker we match you with will guide you through the following steps:

  • Downloading your credit reports and optimising them in order to identify any inaccuracies or outdated information that could affect your application
  • Readying your paperwork, including proof of income and any other documentary evidence that could increase your chances of approval
  • Finding the right lenders who will look favourably on your specific income type and the best interest rate deals

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Can you get a mortgage with no income?

Yes, potentially, but you will need to show you have some way of making your repayments every month, at least for the short to medium term. To show this you’d normally need to have high levels of cash assets and ideally be able to show some future income source. A large contract due to start within the next few months for example could be enough to secure the loan.

There will not be a large number of lenders open to applications when you have no income at all, so it’s vital you find a broker who has experience in no income mortgages and contacts with the right lenders.

Can you include bonuses and commissions?

Yes, most lenders will be sympathetic to the fact that a lot of people are paid with a mix of basic salary and commission or bonuses and so will be set up to factor these sorts of payments into their affordability calculations. The key thing to note here is that different lenders may treat bonuses and commissions in different ways.

Santander for example will accept income from an annual bonus but will only count 65% of it. The Bank of Ireland will normally use 100% of contractually guaranteed bonuses, but only 50% of regular but variable bonuses.

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Get matched with a broker experienced in complex income types

Finding the right mortgage when you have complex income types can involve hours of research if you’re not an expert, as eligibility criteria and allowable income varies so much depending on where you go.

Luckily our broker matching service can match you, free of charge, with a broker who has specific experience in securing mortgages for people with non-standard income types, saving you both considerable time and money.

Give us a call now on 0808 189 2301 or make a quick online enquiry and we’ll assess your needs and find you exactly the right broker for you. All of the advisors we work with have been pre-vetted by us so that you can rest assured you’ll be in safe hands.

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FAQs

Yes.

Not everyone’s income can be evidenced in the form of payslips, so depending on where your income comes from and the requirements of the individual lender you may not need 3 months’ payslips. Your broker will be able to let you know exactly what documentation you need to provide.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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