We will verify income on every application. We will only accept income contracted and paid in £GBP for our affordability assessment.
For new customers
For repayment mortgages a minimum household income of £20,000 per annum is required.
Interest only or part and part is only available where one applicant earns in excess of £50,000 per annum or joint income exceeds £75,000 per annum (where neither applicant fulfils the individual income requirement of £50,000).
For existing customers moving home
For Port and Mover applications a minimum household income of £20,000 per annum is required. Exceptions may be considered for existing customers who do not require additional borrowing.
Additional borrowing on interest only is only available where one applicant earns in excess of £50,000 per annum or joint income exceeds £75,000 per annum (where neither applicant fulfils the individual income requirement of £50,000).
The following is applicable to both new and existing customers:
We will not normally include income derived from benefits as part of our income and affordability assessments.
Directors with a shareholding of 25% or greater
We will normally use the average of the last two years’ director’s remuneration and dividends or the most recent year if lower.
We will normally use 100% of contractually guaranteed income (including guranteed bonuses, overtime and commission) and 50% of regular but variable earnings (including variable bonuses, overtime and commission). Our underwriters have some discretion to use a different proportion of variable earnings but a historic record of these earnings will normally be required in order to exceed 50%, typically three years.
Employment in a family business
We can consider applications from applicants employed by their family on merit of each individual case. We may request additional supporting information.
Fixed term contracts
Fixed term contracts are treated on merit and in context of each individual case. If the income is to be used in our assessment of affordability we would typically want the applicant to be able to demonstrate:
- Evidence of previous contract renewal
- Not all the income is dependent on a fixed term contract, for example a joint application with one applicant on a fixed term contract
- A sufficient remaining period on the contract to warrant the approval of a long term loan.
Applicants must have a minimum of two years fostering income.
Income will be based on a two year average or the latest year if it’s lower. We will verify applicant’s income with:
- a letter from the Foster Agency confirming the total income paid for each of the last two years, or the last years SA302’s and supporting tax year overviews and
- the latest bank statement showing receipt of foster care payment on all cases
Foster children must be entered as financial dependents.
Investment or rental income
Investment or rental income will not normally be considered as allowable income unless it can be treated as an ongoing business. If this is the case, criteria for self employed applicants will apply.
We will accept up to 100% of child maintenance income. However it cannot be the only form of income on an application.
Any children associated with the maintenance payments should be entered as financial dependents.
To verify income we'll need the latest three months’ bank statements showing receipt of payments on all cases. We'll also need one of the following:
- a copy of a Court Order
- Maintenance Assessment letter from the Child Support Agency
- a written private agreement drawn up between the separating parties
If any payment has been missed in that period, then the income cannot be used as part of the affordability assessment.
Pension income may be used to support a mortgage advance, as long as it can be fully verified and guaranteed for life.
We can consider using income from applicants with second jobs. The applicant must have held the two positions for at least 12 months.
Second incomes do not need to be in the same line of employment. Our underwriters will assess whether the income quality is adequate and if so, it will be included within the assessable income.
If self employed, you must have been trading for a minimum of 3 years but only the last 2 years' figures will be used.
Contractors can continue to apply as self-employed under the existing criteria or as a contractor. Details of the contractor criteria can be found under Contractor.
Applicants can be considered who employ the services of an umbrella company subject to us being able to adequately verify income for a two year period. We will normally use an average of the last two years’ income or the most recent year if lower.
Zero hour contracts and agency employment
We will not usually consider income derived from a zero hours contract or agency employment as part of the affordability assessment.