Income types
UK Mortgages by Income Type
Lenders disagree on what counts as income. Of the 75 lenders whose criteria we track, 22 count up to all of your regular overtime (often only with a P60 or 12 months' history) and 16 count half. Bonus, commission, dividend, lodger and maintenance income each have their own lender pool and weighting rules, so the same applicant can be assessed for noticeably different amounts at different lenders.
How do UK lenders treat different types of income?
UK mortgage lenders rarely apply 100% of variable, additional or non-employment income to the affordability calculation. Each lender publishes its own treatment for bonus, commission, overtime, dividends, rental income, lodger income, child benefit, child maintenance, and freelance / second-job income. Two applicants with identical gross-income figures can be offered very different mortgage amounts based purely on which slices each lender accepts.
How is mortgage affordability assessed if your pay is variable?
Most lenders that publish a figure count 50-75% of bonus, commission and overtime, but a third or more count all of it. For overtime that is 22 of the 54 lenders that publish a figure, mostly building societies and specialists such as Skipton and Principality. So the same applicant can be assessed for noticeably different amounts at different lenders.
Do lenders count overtime, bonus and commission?
Most do — but at varying percentages. Common treatments:
- Regular monthly bonus: 50-100%. Some lenders count a regular monthly or quarterly bonus in full (NatWest; Skipton if it's regular over 12 months; Pepper if it's paid monthly). Others count 60% however often it's paid (Halifax, HSBC, TSB). Across all bonuses, 50% is the most common figure (24 of the 59 lenders that publish one), mostly for annual or discretionary bonuses.
- Annual bonus: 50% applied, averaged over 2 years of P60s.
- Commission: 50-100% — same logic as bonus, with stronger requirements for evidence (12-24 months commission statements).
- Overtime: 50-100% if regular and on payslips. 22 of the 75 lenders whose criteria we track count up to all of it (Skipton and Principality among them); Halifax counts 60%. Guaranteed or contracted overtime is usually counted in full.
Lenders that accept variable income at 100% (rather than 50%) can lend noticeably larger amounts. See which lenders count overtime, bonus and commission for each lender's percentage.
Can I use rental income to support a mortgage?
It can be, in two distinct ways. Existing buy-to-let income: some lenders count part of it as supporting income on a residential mortgage, while others assess the buy-to-let separately and leave it out. Lodger income (Rent-a-Room) is more restrictive, and some lenders exclude it entirely — Halifax, for example. Around 68 lenders' published criteria count one or other form of rental income; see the full list for which. Holiday let income is a specialist case: only some lenders count income from a holiday let you already own, usually evidenced by 2 years' tax returns. Examples are Hodge, Furness BS (50% of the profit from a mortgage-free holiday let) and TSB (counted as self-employed income from 2 years' verified figures).
Will lenders count benefits, child maintenance, or pension income?
Child Benefit: 53 of the 75 lenders whose criteria we track accept it as standard, usually at 100%. (Tax credits closed in April 2025 — all claimants moved to Universal Credit, so there are no live tax-credit awards to evidence.) Universal Credit: mainstream lenders increasingly accept (Halifax, Nationwide, Skipton). PIP / DLA: typically accepted by most lenders provided it's long-term. Child maintenance: accepted by around 69 lenders, usually requiring a Court Order or a Child Maintenance Service (CMS) arrangement, often at 50-100%. Pension income: widely accepted for lending into retirement; rules vary by age at term-end.
How much can I borrow on dividend income?
For limited-company directors, lenders use either your salary plus the dividends you've drawn over the latest one or two years, or your salary plus your share of the company's net profit (usually after corporation tax). The net-profit route can raise the income a lender uses if you leave profit in the company: 29 of the 53 lenders in our self-employed dataset can use it (16 as standard, including Aldermore, Atom Bank, Bath BS; the rest only for majority or 100% owners, or on referral). See which lenders use net profit. Elsewhere, your borrowing is limited to your personal drawn income.
What lenders look at
Four factors determine how income is weighted:
- Sustainability — lenders want evidence of at least 2 years of consistent income. One-off payments rarely count.
- Guaranteed vs discretionary — contractual / guaranteed income counts at a higher weighting than discretionary.
- Taxed vs untaxed — most lenders want income declared to HMRC. Untaxed income (some benefits, rent-a-room) is often discounted or excluded.
- Documentation — P60, SA302, tax calculations, payslips, bank statements, or for maintenance a court order / CMS letter.
Check your affordability
See how your specific mix of basic + variable income is treated across the 57 lenders we check.
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