Getting a Mortgage With Bonus and Commission Income

Yes, it’s possible. Most lenders will let you put bonus or commission income towards your mortgage, although not all of them will allow 100% of this type of income to be counted towards your overall earnings figure (see the lending criteria section below for more details). Whether you’re approved or not will depend on various factors, such as how regularly you receive additional income and the total amount you receive.

If, for example, most of your income comes from bonuses or commissions, you may find getting approved for a mortgage hard.

However, if you earn a similar amount in bonus and commission income each month on top of your base salary, you’ll typically be viewed more favourably. Lenders will still carry out a thorough affordability assessment to ensure you can afford your mortgage repayments if you missed your targets and didn’t receive any additional income for a period of time.

The key criteria lenders will look at are these:

• The percentage of total income that’s derived from bonuses/commissions
• How often are you paid (weekly, monthly, quarterly, annually, one-off)?
• Are you contractually guaranteed or discretionary?

As well as the above, the following are some of the things lenders will want to know before you apply:

• What portion of your total income is derived from bonuses and commissions?
• What is your basic salary (if any)?
• Your earnings over the past 2 years

Again, most lenders are happy to consider overtime income when assessing affordability. However, they’ll base their lending decision on how much overtime income you receive, how often you receive it, and whether overtime is guaranteed in your line of work.

Yes, you can get a mortgage if all of your income is from commission, but it may limit your lender options. Some lenders are comfortable with 100% commission-based income, especially if it’s regular and backed by at least 12 months of evidence. Working with a broker can help you find the right lender who understands your income structure.

Yes, it’s possible to get approved for a buy-to-let mortgage with additional income. However, lenders may apply stricter criteria, such as landlord experience, proof of a clean credit record, and age limits.

There are a few lenders who won’t accept any bonus or commission income at all. Some others cap the amount an applicant can include in their application, for example, at 50% or 60%. Others will accept 100% commission or bonus income.

Lenders need as much assurance as possible that borrowers will be able to meet their monthly repayments, and it isn’t always easy to determine when an applicant’s income is non-standard and possibly fluctuating.

While each lender will have its own set of lending criteria, they’ll typically look at:

Suppose all or most of your earnings come from commissions or bonuses. In that case, you may find getting accepted for a mortgage tricky because lenders will be concerned about your inconsistent and fluctuating income. They’ll worry that a missed target may impact your ability to pay your mortgage. However, that’s not to say you can’t get a mortgage. You may have to use a specialist lender.

If your commission or bonus income is a small part of your overall earnings, getting approved should be more straightforward (as long as you meet all other lending criteria).

Lenders will want to know how regularly you receive your commission or bonus income.

Some will only accept annual payments, while others will accept monthly or quarterly payments. The rationale here is that you should be able to budget better if the payments are consistent and you know when you’ll receive the additional income.

Some lenders will require you to have earned commission or bonus income for 2-3 years before they’ll consider it. However, others will accept 12 months if you can prove the payments are regular and consistent.

It’s worth noting that some lenders will calculate your commission or bonus income as an average over 2 years. So, earning more additional income in year 1 and less in year 2 could reduce the overall amount they’ll consider.

This is particularly relevant to overtime. Some professions guarantee a certain amount of overtime. If this is the case and you can prove it, lenders may view you more favourably.