First-Time Buyers Bonus Commission Mortgage Affordability: What Lenders Allow

Many first-time buyers rely on a mix of basic salary, bonus income and commission to make up their total earnings. But when it comes to mortgage applications, lenders do not always treat variable income the same as fixed salary. Understanding how first time buyers bonus commission mortgage affordability is calculated helps avoid confusion and ensures you present the strongest possible application.

This guide explains how lenders assess bonus and commission income, what evidence they require, and how to strengthen an application where variable income makes up a significant portion of earnings. This article provides general information only and does not offer regulated mortgage advice.

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Why Bonus and Commission Income Matters

For many first-time buyers, bonus and commission income significantly boosts total annual earnings. However:

• Bonuses may not be guaranteed
• Commission can vary monthly
• Seasonal fluctuations can distort income levels
• Some employers restructure bonus schemes regularly

Because variable income can be less predictable, lenders take a more cautious approach to assessing it.

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Do Lenders Accept Bonus and Commission Income?

Yes — most lenders accept bonus and commission income, but they often apply different rules than they do for basic salary.

Depending on the lender, they may include:

• 100% of bonus or commission
• 50–75% of variable income
• Only guaranteed elements
• The average of the last 3, 6 or 12 months
• The average of the last 2–3 years (for large annual bonuses)

The exact approach varies significantly between lenders.

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The Three Main Categories of Variable Income

1. Regular Monthly Commission

Common in sales roles.
Lenders may use:

• A 3–6 month average
• A 12-month average if income fluctuates widely

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2. Quarterly or Annual Bonuses

Lenders often prefer:

• 1–2 years of bonus evidence
• Confirmation that the bonus scheme is ongoing
• Payslips or P60 evidence to show consistency

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3. Performance-Based or Seasonal Income

This can be more difficult to use, as it varies significantly.

Some lenders cap the amount they will include.

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What Lenders Look For

Lenders assess variable income based on:

1. Consistency Over Time

Stable recurring bonus or commission income is viewed more favourably.

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2. Employer Confirmation

Some lenders request an employer reference confirming:

• Bonus scheme details
• Whether income is guaranteed
• Expected continuation

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3. Track Record in Role

If you recently changed jobs, lenders may want to see:

• A history of earning similar commission in previous roles
• Confirmation from your new employer about expected income

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4. Percentage of Total Income

If most of your earnings come from bonus or commission, lenders may apply stricter calculations.

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5. Downward Trends

Significant drops in variable income may cause lenders to use a lower average.

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Evidence Lenders Typically Require

You may need to provide:

• 3–12 months of payslips
• P60 for annual income
• Employer reference (for some lenders)
• Contract of employment
• Bank statements showing commission payments

The more stable the income, the easier it is to include fully.

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How Bonus and Commission Affect Affordability

Fixed Salary:

Usually taken at 100%.

Variable Income:

Often taken at a reduced percentage or averaged to smooth out fluctuations.

For example:

• One lender may use 100% of monthly commission
• Another may use 60%
• A third may average 3 months’ data
• Some will average 12 months or use the lower of recent figures

These differences can greatly affect borrowing potential.

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Common First-Time Buyer Scenarios

Scenario 1: High commission, modest basic salary

Some lenders will accept most or all commission; others may offer much lower borrowing.

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Scenario 2: Large annual bonus

Lenders may use the average of the past two years.

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Scenario 3: New job with commission

Many lenders require evidence of previous similar commission in earlier roles.

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Scenario 4: Variable monthly income with no clear pattern

Manual underwriting or specialist lenders may be more flexible.

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Scenario 5: Overtime plus commission

Some lenders combine all variable income into a single average.

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How to Strengthen a Mortgage Application When You Rely on Bonus or Commission

(General Information Only)

Many first-time buyers choose to:

1. Provide as many payslips as possible

More evidence supports stronger affordability.

2. Show consistent incoming payments on bank statements

Lenders want to see funds actually received, not just reported on payslips.

3. Maintain steady employment history

Frequent job changes can make variable income harder to assess.

4. Avoid relying on temporary spikes

One unusually high bonus month will not represent typical earnings.

5. Keep credit and spending behaviour stable

Underwriters consider the whole financial profile, not just income.

6. Understand which lenders treat variable income most favourably

Different lenders apply different percentages and averages.

These are general considerations only.

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Do Lenders Prefer Basic Salary Over Variable Income?

Generally, yes.
Basic salary is predictable, while variable income can fluctuate. However, strong, consistent commission or bonus payments can still support a successful application.

Lenders may be more flexible if:

• You have a strong deposit
• Your spending behaviour is stable
• You are in an industry where variable income is common

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How Lenders Stress-Test Bonus and Commission Income

Even when variable income is accepted, lenders stress-test affordability using higher interest rates. If the stress-tested repayment appears too high relative to income and spending, lenders may reduce the amount they include from bonus or commission.

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Summary

A first time buyers bonus commission mortgage affordability assessment depends on:

• The type of variable income
• How consistent and predictable it is
• How long you have earned it
• The percentage lenders allow
• Whether averages or fixed amounts are used
• Overall bank conduct, credit history and financial stability

Bonus and commission income can significantly enhance affordability when well evidenced, even though lenders often take a cautious approach.

This article provides general information only. For personalised guidance, regulated mortgage advice is required.