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Commission Income Mortgages

Commission Income Mortgages

  • Supporting you with expert advice and top-quality products
  • Working closely with you to understand your wants and needs, ensuring these align with your budget.
  • Finding you the most suitable deal for now and in the future.

Please contact us for a no-obligation conversation with an adviser about the most suitable mortgage option for you.

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0203 195 1982
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Securing a commission income mortgage

  • Receive commission as a large part of income: what are your commission income mortgage options?
  • Lenders can be wary of commission, what is the commission income mortgage qualification?
  • How can you get a mortgage for commission based income according to lender affordability criteria?

What is the definition of commission income?

  • Commission is typically money paid monthly on top of your basic regular salary
  • Lenders will often look at your last three pay slips, consider the commission on top of your basic salary and average that figure to calculate your income, but this assessment can get more complex depending on the lender
  • Some lenders will use all of your commission, others will use half of your commission, and some none, which will have a big impact on your potential borrowing
  • If your commission exceeds your basic salary some lenders may cap your income at your basic salary level, or others may even decline your application
  • You need to talk to the right lender at the outset

How much can I borrow with a mortgage for commission based income?

Commission income mortgage qualification – some factors

  • If you are looking for a commission income mortgage, then a consistent track record is important. What we mean by this is that commission is paid monthly with no gaps or no huge variances.
  • There are quite a few lenders that will take 100% of the income no matter how it is split between basic and commission.
  • With a 2-year track record, most lenders will take an average of the P60 figures when assessing what income is to be assessed.
  • With a strong track record on an upward curve, some lenders will use the most recent figures, or average of the last 3-6 months’ payslips. This can work out very favourably for you.

Your Borrowing = 4.5 to 5.5 x your income

How to calculate commission income mortgage simple illustrations

Basic salary only (4.5. multiple)

Basic salary of £50,000 plus commission of £50,000

Lender assesses basic salary only as income

Assume multiple of 4.5 x income

Mortgage amount (£50,000 x 4.5) = £225,000

 

Basic salary plus half of commission income (4.5. multiple)

Basic salary of £50,000 plus commission of £50,000

Lender assesses half of commission as income in addition to basic salary

Assume multiple of 4.5 x income

Mortgage amount (£75,000 x 4.5) = £337,500

 

Basic salary plus full commission income (4.5. multiple)

Basic salary of £50,000 plus commission of £50,000

Lender assesses 100% of commission as income in addition to basic salary

Assume multiple of 4.5 x income

Mortgage amount (£100,000 x 4.5) = £450,000

 

Basic salary plus full commission income (5.5. multiple)

Basic salary of £50,000 plus commission of £50,000

Lender assesses 100% of commission as income in addition to basic salary

Assume multiple of 5.5 x income

Mortgage amount (£100,000 x 5.5) = £550,000

  • Wide variance depending on lender (£225,000 vs £550,000 in these examples)
  • If only need modest loan may not matter but if looking at say, moving home, assessment absolutely essential
  • Brokers play such an important role because look at factors and ensure opt for right lender at the beginning
  • We ensure you don’t have to waste your time and effort
  • We make the process as smooth as possible and ensure your application goes through smoothly

Speak To An Expert

Our key aims are to fully understand what you are looking to achieve, create a solution tailored to your needs, deliver results through an excellent service and build a relationship for life.

0203 195 1982
Email us

What commission income mortgage rates can I get?

  • The actual mortgage rates you will be offered will be dependent on your personal circumstance and deposit level. Your broker will advise you on mortgage deals for you.
  • Therefore, think about how much you want to spend each month on your mortgage repayments.
  • Only brokers have access to a range of lenders in the market, and we have access to exclusive mortgage rates.

Essential to talk to a commission income mortgage specialist

  • We understand that without a standard monthly salary the mortgage market can be hard to navigate. This is not just in terms of borrowing level, but type of mortgage, interest rate, term, and fees.
  • We can advise you on which lender is the most appropriate for you, depending on the level of borrowing you are looking for. We work for you to present your case to the most suitable lender for a positive outcome for you and your family.
  • A mortgage is such a large financial commitment. Your loan affordability is carefully scrutinised by the lender. Those with a complex income with a large commission element can find this quite a painful process. We ease this pain for you.

Your mortgage with a commission based income structure

One of the first things to consider is your repayment vehicle.

Do you want to opt for?

  • a repayment loan?
  • an interest only loan?
  • part & part which is a combination of the two?

What is a Repayment mortgage?

  • You make monthly payments and at the end of the term the loan is repaid.
  • With a repayment mortgage the monthly payments are higher but with less risk.

What is an Interest Only mortgage?

  • You simply pay the interest on the mortgage loan and look to pay off the loan later with say, the sale of property, investments, or bonuses.
  • With an interest-only mortgage the monthly repayments are lower but is assessed as higher risk.

Your commission income mortgage product

You will also need to consider which type of mortgage product is best for you as this determines your monthly payments.

  • Fixed Rate Mortgage. Your repayments are set for 2,5, 10 years.
  • Variable mortgage. This is sometimes cheaper, but the rate can go up or down depending on the market and is often penalty free if you want to remortgage.

Rather than asking how much it will cost, consider how much can you afford.

Your mortgage specialist will then structure your mortgage appropriately, based on your risk profile.

How much deposit do I need?

  • The long answer is that it is dependent on your circumstances: purchase price, income, and property type.
  • The short answer is – about 5%-10%.
  • Lenders purely take a risk-based approach to pricing, meaning from a starting point of a 5% deposit, every additional 5% deposit you put down increases the range of lenders you can choose from and therefore decrease the cost of the loan as you are determined as lower risk.
  • Lenders consider you a low-risk buyer when you put down a 25% deposit or more.
  • The last key figure is a 40% deposit. Once you have a 40% + deposit you get the very cheapest pricing available and very often the exceptionally low rates you see on best buy tables.

We are here to help you with your mortgage for commission based income.

As a top-rated mortgage broker, we are here to guide you on every step of your journey.

  • Your dedicated mortgage broker will provide you with detailed, personalised advice on how much you can borrow and source exclusive mortgage deals when advising you on your commission income mortgage qualification.
  • In today’s mortgage market, each borrower is assessed on their individual affordability merits. Once we have talked through your personal circumstances, we will advise you on mortgage interest rates for you.
  • This means you get the right advice crucial to obtaining a mortgage with commission based income.

Mortgage Advice

  • We take the time to understand your mortgage goals to secure the optimal mortgage deals for you.
  • Our mortgage advice is second to none. We will advise you on mortgage interest rates appropriate for you.
  • Our aim is to maximise your borrowing potential, minimise your monthly payments and work with you throughout the lifecycle of the loan to manage down the mortgage.
  • You are treated as a valued client, not a transaction, and dealt with by an experienced, empathetic person, not an algorithm.
  • We have access to competitive deals and with no affiliation to third parties.
  • We will always act in the best interests of you, our clients, to give you the best mortgage advice possible to achieve the right mortgage for your life’s goals.

How We Can Help

  • As you can see above, the more complex the income, the more help you often need to be approved for a mortgage with a commission based income and understand the commission income mortgage qualification.
  • We specialise in this area, so would encourage you to speak to one of the Team just to see what your options are before progressing too far with an application when assessing how to calculate commission income mortgage. This will ensure you get a smooth experience when applying for your commission income mortgage.

Your property may be repossessed if you do not keep up repayments on your mortgage.

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FAQs

How do mortgage lenders treat commission income on top of my basic salary?

Lenders fall into three broad groups: those that use 100% of commission, those that use 50%, and those that use none. Most will look at your last three payslips and average the commission shown, but some will use P60s over two years instead. Which group a lender sits in often makes a bigger difference to your borrowing than the headline income multiple does.

Yes, with a meaningful number of lenders, especially where the commission is paid monthly and the track record is consistent. On a £50,000 base plus £50,000 commission at a 4.5 times multiple, the difference between 0% and 100% commission inclusion is roughly £225,000 vs £450,000 in borrowing, and going to 5.5 times pushes it to £550,000. Lender choice on commission inclusion is the single biggest variable in most of these cases.

Only what's actually been paid, in most cases. Lenders work from realised commission shown on payslips or P60s rather than the OTE figure in your employment contract, because OTE is a target rather than guaranteed income. If your current year is tracking well above the previous year, some lenders will use a 3 to 6 month average of recent payslips, which can capture more of an upward trend

Yes, with some lenders, but others cap the commission they'll count at the level of your base or even decline outright. This affects a lot of estate agents, recruiters and senior sales roles where commission can be 50% to 80% of total income. Specialist lenders and a small group of high street banks are typically the better route where commission dominates, and getting this right at the application stage avoids wasted credit searches.

Most lenders want a 12 month track record, and a two year P60 history opens up more options. On a strong upward trend, some lenders will look at just the last 3 to 6 months of payslips, which can be useful if you've moved into a higher-earning role recently. Consistency matters as much as length, so gaps or large variances in monthly commission are worth flagging up front.

Yes. Heron Financial works regularly with employed borrowers whose income includes a significant commission element, including those where commission exceeds base salary. The team reviews payslips and P60s before approaching any lender, matching the case to one that will use the highest acceptable percentage of commission rather than excluding it. The initial conversation is no-obligation.