Lenders often distinguish between different types of variable income. Regular overtime that has been earned consistently with the same employer is generally viewed more favourably than occasional or ad-hoc overtime. Where overtime forms part of your normal working pattern, it may be treated almost like basic income.
Bonus income can also be acceptable, particularly if bonuses are paid annually or quarterly and follow a predictable pattern. Even discretionary bonuses may be considered where there is a clear history showing they are paid regularly.
Commission-based income and shift allowances may also be included, especially where earnings are stable over time. Each income type is assessed slightly differently, which is why lender choice and presentation are so important.
When reviewing overtime & bonus income mortgages, lenders usually look at income over a longer period rather than focusing on individual months. This often involves averaging income over six, twelve or sometimes twenty-four months to smooth out fluctuations.
Some lenders are willing to use 100% of overtime or bonus income, while others may only include a percentage. The amount they’ll accept depends on how consistent the income has been, whether it’s guaranteed, and how long you’ve been earning it.
Evidence plays a crucial role. Payslips, P60s and bank statements are typically required to show income history clearly. Where employment has been stable and income patterns are easy to follow, lenders are generally more comfortable including variable income in full.
