This calculator is an estimation of how much you could borrow. If you’re ready to take out a mortgage, speak to a Revolution brokers to see what options are available.
Many people receive a basic salary and then a larger proportion of their income through bonuses, regular overtime or commissions.
The Revolution Brokers team often hears from applicants who have been turned down for the mortgage they need since their regular bank will not include variable income or only a proportion of this revenue.
Here we'll look at mortgage options for applicants of varied income and how the process works!
For more help with finding a mortgage suited to your income structure, give us a call on 0330 304 3040, or drop a message to info@revolutionbrokers.co.uk.
Lenders are all different and have policies about how they treat commissions. One of the most common scenarios is in sales positions, where your basic salary is topped up by commissions calculated against the sales achieved.
You might also be paid bonuses when you hit a KPI or at the end of a month or quarter.
A lot depends on the lender and how often you receive your bonus or commission payment. Some lenders only include monthly payments, and others only annual or quarterly commissions.
Most lenders who offer flexibility in accepting commission-based salaries like to see a history of payments to calculate how regularly this is paid and the average value.
It's also vital to work with an experienced broker if your commissions are worth more than your primary salary. You need a lender who includes 100% of your commission earnings in their calculations if you want to maximise the mortgage you can borrow.
Below you'll see the difference between Lender A and Lender B, owing to their policies on how they include commissions in their affordability assessment. This example is based on an applicant who earns:
|
Lender Policy on Commission Income |
Total Income Included |
Maximum Mortgage |
|
Lender A - only incomes commission capped at the same value as basic salary |
£15,000 salary plus £15,000 commissions. |
Five times income policy = maximum mortgage of £150,000 |
|
Lender B - includes 100% of commission earnings |
£15,000 salary plus £30,000 commissions. |
On the same five times income policy = maximum mortgage of £225,000 |
It isn't mandatory with all lenders, but most prefer to see two or three years of regular commission earnings. Others will ask for a few months or a year's worth of payslips to work out your average commission.
Again, it all depends on the lender. Let's take the same commission earner, but with a difference between the last two years:
Three different lenders, all offering a mortgage at up to five times average annual income, might offer a very different mortgage maximum:
|
Lender Policy on Commission Income |
Total Income Included |
Maximum Mortgage |
|
Lender A - includes 100% of commission over the last two years |
£15,000 salary, plus £25,000 commission |
£200,000 |
|
Lender B - includes 100% of commission over the last 12 months |
£15,000 salary, plus £30,000 commission |
£225,000 |
|
Lender C - includes income from the last quarter, averaged out over the year |
£15,000 salary, plus £20,000 commission |
£175,000 |
Not always, no. Some lenders include 100% of your commissions, and others have a cap, for example, of 50%.
The below table shows what that looks like for the same applicant, with a £15,000 basic salary and £30,000 of commission, with three lenders all offering up to five times annual income as a mortgage cap.
|
Lender Policy on Commission Income |
Total Income Included |
Maximum Mortgage |
|
Lender A - will not consider commission earnings |
£15,000 basic salary £0 commission |
£75,000 |
|
Lender B - includes 50% of commission earnings |
£15,000 basic salary + £15,000 commission |
£150,000 |
|
Lender C - includes 100% of commission earnings |
£15,000 basic salary + £30,000 commission |
£225,000 |
Lenders always need to calculate affordability to be assured that you can afford to keep up with the repayments.
This calculation depends on the factors we have explored in terms of calculating your commission income and how much is included in the affordability assessment.
Some lenders will offer up to three times your annual salary, and others four, five, or even six times, so it's essential to apply to the right lender.
Bonuses work a lot like commissions. Lenders will consider:
Bad credit makes it harder to get a mortgage, so it's crucial to consult a whole-of-market broker to understand which lender is more likely to approve your application.
There are niche bad credit lenders who will consider applicants even where severe adverse credit history exists, but you should always seek professional advice.
Revolution is a whole-of-market broker, so we can analyse the deals available and help structure your application to mitigate the risk of having bad credit.
Another risk factor is the type of property you wish to buy. Anything classed as non-standard might need a specialist mortgage lender, for example:
Having a variable income and borrowing against a non-standard property makes your application a higher risk on two fronts. Therefore, it is highly advisable to seek support from the Revolution team to improve your mortgage approval chances.
There are, although some lenders have caps and criteria that you will need to meet. These might include:
Usually, lenders will want to see:
If your application is higher risk, for example, because you have bad credit, you might need to provide up to a year's worth of payment evidence.
It is by no means impossible to find a mortgage based on your regular bonuses or commissions. Still, given the wide variety of ways a mortgage lender will assess this income, it is critical to seek professional support to direct your application to the right provider.
Contact Business finance broker on 0330 304 3040, or email us at info@revolutionbrokers.co.uk for more information and to find the mortgage borrowing you require.
Do I Qualify for First-Time Buyer Status? Working out whether or not you are a first time buyer may seem obvious - but there are plenty of scenarios where your position isn't clear! Examples might include: New buyers who have inherited a property they rent out. Buy-to-let investors that have never purchased a residential hom..
Most homeowners know that remortgaging means switching a mortgage from an existing lender over to a new deal. However, the process isn't always obvious. If you're on a fixed-rate deal, you'll want to get ahead of the end of the term to avoid being shuffled onto a higher standard variable rate where your interest costs will undoubtedly ..
Finding a great mortgage as a first time buyer can feel like an uphill struggle, with a larger proportion of applicants being turned down than a year ago. Around 20% of first-time mortgage applicants are rejected, usually because of the lender risk associated with their loan. Today, Revolution Brokers explains the highest risk facto..
Investing in a rental property can be an excellent way to get onto the property ladder and earn an income. However, if you haven't owned a residence before, you might find that a mainstream bank will automatically turn you down for a buy to let mortgage. In today's guide, the Revolution Brokers team explains how you can become a ren..
Buying a home for the first time is a massive step - but the deposit is often a stumbling block for first-time buyers. It can take years to save a sufficient amount or be impossible, so there are several ways to approach the problem and get your foot onto the property ladder. From April 2021, the UK government launched the new mortg..
There is little doubt that UK buyer confidence is at an all-time high. We've recapped previously in our blogs how property market growth and prices have soared over the last few months! As we head into summer, one key area of mortgage finance seems to be expanding rapidly: property auction finance. In this article, the Revolution..
If you refer a friend for a mortgage or any
type of finance you’ll both receive £25
each when their new application
successfully completes.
We are proud
members of the:
The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.
Revolution Brokers understands that mortgages can be complex and confusing!
Ask us any question you might have, and one of our skilled consultants will come back to you as quickly as possible.
