Mortgage Declined Because of a Recent Pay Rise: Why Some Lenders Still Hesitate

A mortgage declined because of a recent pay rise often feels counter-intuitive. Earning more should help affordability, not hurt it. However, lenders focus heavily on income stability, not just income level. When a pay rise is very recent, some lenders pause until they are confident it is permanent and sustainable.

This guide explains why lenders can hesitate after a pay increase, how underwriters assess new income, and what evidence can help support a future application.

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Why a recent pay rise can cause lender hesitation

Lenders assess risk over the long term. A mortgage typically runs for decades, so underwriters want reassurance that income used for affordability is not temporary.

A recent pay rise can raise questions such as:

• Has the new salary been fully established?
• Is it guaranteed or conditional?
• Does it rely on probation, promotion, or performance?
• Has it actually been received yet?

Until these questions are answered, some lenders choose caution.

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How lenders assess income after a pay rise

Timing of the increase

Many lenders want to see that the higher salary has already been paid.

If the pay rise:

• Has only just started
• Appears on a single payslip
• Is due to start next month

some lenders may still base affordability on the old salary.

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Permanence of the increase

Underwriters look for confirmation that the increase is permanent.

They may question income where:

• The rise follows a promotion with a probation period
• The increase is linked to targets or performance
• Pay is temporarily uplifted due to cover or acting-up duties

Guaranteed contractual increases are treated more favourably.

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Consistency with employment history

Lenders also assess the wider employment picture.

They may be cautious if:

• The applicant recently changed employer
• The pay rise coincides with a new role
• Employment history is short or fragmented

In these cases, lenders may prefer more time to pass.

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Why payslips matter more than contracts alone

A contract showing a higher salary is helpful, but many lenders still rely on payslips.

This is because payslips confirm:

• The new salary is actually being paid
• No unexpected deductions reduce take-home pay
• Income aligns with what has been declared

Without payslips at the higher level, some lenders will not include the increase.

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Is this treated the same as variable income?

Not exactly, but there are similarities.

Like bonuses or overtime:

• New income needs to be evidenced
• Sustainability is tested
• Short histories reduce confidence

A recent pay rise is usually easier to support than variable income, but timing still matters.

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What evidence can help after a recent pay rise?

1. Multiple payslips at the new salary

Most lenders prefer:

• At least one payslip at the higher level
• Often two or three for wider acceptance

The more payslips showing the new income, the stronger the case.

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2. Employer confirmation

A letter from your employer can significantly help if it confirms:

• The pay rise is permanent
• It is not subject to probation
• It is not performance-dependent

Third-party confirmation often carries more weight than applicant explanations.

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3. Updated contract or variation letter

Where available, written confirmation of the new salary supports payslips and clarifies terms.

This is particularly useful where:

• The role changed
• Responsibilities increased
• Pay bands or grades were adjusted

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4. Affordability without relying fully on the increase

Some lenders may still proceed if:

• Affordability largely works on the previous salary
• The pay rise improves surplus rather than enabling borrowing

Lower borrowing expectations or a larger deposit can reduce reliance on the new income.

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5. Time and consistency

Allowing income to “bed in” often resolves hesitation.

Many lenders are more comfortable after:

• Three months at the new salary
• Six months if the increase was substantial or role-related

Time often achieves what explanations alone cannot.

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Should you wait before reapplying?

In many cases, yes.

Reapplying immediately after a decline often leads to the same result if the pay rise is still very recent. Waiting allows:

• Payslips to build
• Employer confirmation to be provided
• Income patterns to stabilise

This usually increases lender choice and reduces friction.

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Do all lenders treat recent pay rises the same way?

No.

Differences include:

• How many payslips are required
• Whether contracts alone are accepted
• How probation or promotions are treated

Some lenders are comfortable including new salary immediately, while others are more conservative. Matching the application to the right criteria is key.

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What if your mortgage has already been declined?

A decline due to a recent pay rise does not prevent future approval.

However, applying again without:

• Additional payslips
• Employer confirmation
• Time for income to settle

often results in repeat declines.

You can learn more about income assessment in our guide on how lenders assess employment income.

Professional advice can help determine when your application is realistically ready to proceed again.

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Key takeaways

• Lenders prioritise income stability over headline salary
• Recent pay rises may be excluded until evidenced
• Payslips often matter more than contracts alone
• Employer confirmation can strengthen applications
• Time and consistency usually improve outcomes

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This guide provides general information only. Personalised mortgage advice should always come from a regulated mortgage adviser.