Can I include my irregular bonus and commission income in my mortgage affordability calculation?

The short answer

Yes, you can often include bonus and commission income, but it is rarely as straightforward as using your base salary. Lenders view this income as "variable," meaning they will apply their own specific formulas—often averaging it over two years or discounting a portion of it—to determine what they consider a sustainable level of borrowing.

Why this is tricky

High-street lenders are built for predictability. They prefer a fixed, contracted salary because it allows their automated systems to calculate risk with high precision. When your income fluctuates due to bonuses or commission, those same systems often struggle to "see" the true picture of your earnings.

Lenders are fundamentally concerned with sustainability. If you have a bumper year of commission but a quiet one the next, they need to be sure you can still afford your mortgage payments. Consequently, many mainstream lenders will either ignore irregular payments entirely or apply a "haircut" to the amount they count, sometimes only accepting 50% to 60% of your total variable earnings. This can lead to a significant shortfall in the amount you are offered compared to what you might expect based on your total take-home pay.

How Matthew approaches it

When I look at a case involving variable income, the first step is to stop looking at the "headline" figure and start looking at the "lender-friendly" figure. Not all lenders treat variable pay the same way; while one might ignore a bonus that hasn't been paid for 24 months, another might be happy to accept a 12-month history if it is backed by a clear contract or employer letter.

1. Audit the history: I review your last two years of P60s and payslips to identify the consistency of your payments. Lenders want to see a pattern, even if the amounts vary.
2. Target the right lender: I identify lenders who are known to be more "pro-variable." Some specialist lenders will accept 100% of bonus income if it is consistent, while others have bespoke underwriting teams that can look at the "story" behind your earnings rather than just a computer-generated score.
3. Structure the application: We present your income in a way that highlights the reliability of your earnings. If your commission is tied to specific performance metrics, we provide the evidence to show that this is a core part of your role, not a one-off windfall.

What you'll need

• Last two years of P60s: To show the total annual income and tax paid.
• Latest 3–6 months of payslips: To demonstrate the frequency and consistency of your bonus or commission payments.
• Employment contract: Specifically the section detailing your commission structure or bonus scheme.
• Employer reference: A letter confirming your role, the nature of the bonus, and that it is expected to continue.
• Bank statements: To show the actual receipt of these payments into your account.
• Tax returns (if applicable): If you are self-employed or have complex tax arrangements alongside your employment.

Things to watch for

• The "One-Off" Trap: If your bonus was a one-time performance reward, lenders will likely exclude it entirely from their calculations.
• The 24-Month Rule: Many lenders require a two-year history of variable income. If you have only been in your role for six months, your options will be more limited.
• Over-borrowing: Just because a lender can include your bonus doesn't mean you should max out your borrowing. Always ensure you can afford the payments on your base salary alone.

Next steps

Every lender has a different "appetite" for variable income, and the difference in borrowing capacity between them can be tens of thousands of pounds. If you are unsure how your specific pay structure will be viewed, I am happy to look at your figures. You can book a call with me or chat with Molly to discuss your situation in more detail.

Important Notice: This article is for general guidance only and does not constitute regulated financial advice. Mortgage criteria and rates change frequently. Always consult a qualified mortgage adviser who can assess your individual circumstances. Your home may be repossessed if you do not keep up repayments on your mortgage.