To get a mortgage using overtime, bonuses, or commission, UK lenders typically average your variable earnings over the last three months or two years. Most high-street banks will only factor in 50% of this figure to account for potential fluctuations, though specialist lenders may consider up to 100% if the income is proven to be sustainable.
Following the FCA mortgage reforms published earlier this year, lenders are now more focused on 'income resilience.' This means they want to see that your extra pay is a consistent feature of your job rather than a one-off windfall.
How Lenders Calculate Variable Income
Lenders don't look at variable income the same way they look at your base salary. Your base salary is guaranteed, but commission and overtime can stop at any time.
Most providers use one of two methods to calculate your usable income:
- The Averaging Method: They take your variable earnings from the last three months or two years and find the mean average.
- The Lower Of Method: They look at your current year's bonus versus last year's and take the lower of the two figures.
The 'Haircut' Rule
Many lenders apply a 'haircut' to variable pay. If you earned £10,000 in commission last year, a bank applying a 50% haircut will only include £5,000 in their affordability calculators.
High-Street vs Specialist Lenders
Where you apply makes a significant difference to how much you can borrow. High-street banks generally have stricter, 'one-size-fits-all' rules.
| Lender Type | Typical Variable Income Treatment | Evidence Required |
|---|---|---|
| High-Street Bank | 50% of average | 2 years of P60s |
| Specialist Lender | 80% – 100% of average | 3 months of payslips |
| Building Society | Case-by-case basis | P60s + latest payslip |
Specialist lenders are often more flexible for those in sales, healthcare, or emergency services where overtime and commission are fundamental to the role.
Using Overtime for a Mortgage
Overtime is common in sectors like nursing, policing, and manufacturing. Lenders want to see if the overtime is 'guaranteed' or 'voluntary.'
If your contract states you must work 10 hours of overtime, it is more likely to be counted at 100%. If it is voluntary, lenders will look for a consistent track record over at least six months.
Whatever the rate environment (Bank Rate was 3.75% when this article was published in July 2026), every pound of income helps in meeting lenders' affordability checks.
Pro Tip: If your overtime has increased recently due to a promotion, some lenders may ignore the older, lower figures and focus on your most recent three months. This can significantly boost your borrowing power.
How Bonuses Affect Your Application
Bonuses are categorised as either 'guaranteed' or 'discretionary.' A guaranteed bonus is written into your contract and is usually treated similarly to base salary.
Discretionary bonuses—such as annual performance payouts or Christmas bonuses—are viewed with more caution. Lenders will want to see your P60s for the last two years to ensure the bonus isn't a one-off event.
If you received a large bonus in 2025 and a smaller one in 2026, most lenders will use the 2026 figure. If the trend is upward, they will usually take the average.
Commission-Based Roles
For those in recruitment, car sales, or real estate, commission often makes up the bulk of their take-home pay.
We often see clients where the base salary is £25,000 but the commission is £40,000. In this scenario, applying to a lender that only accepts 50% of commission would drastically reduce the property price you can afford.
Realistic Example:
- Base Salary: £30,000
- Annual Commission: £20,000
- Lender A (50% commission): Uses £40,000 for affordability (Max loan ~£180,000).
- Lender B (100% commission): Uses £50,000 for affordability (Max loan ~£225,000).
A specialist first-time buyer mortgage might be the difference between a one-bedroom flat and a semi-detached house.
Evidence You Will Need
To prove your variable income, you should have the following documents ready:
- Last 3-6 months' payslips: These must show the breakdown of basic pay vs variable pay.
- Last 2 years' P60s: To prove year-on-year consistency.
- Employment Contract: Especially if any part of your extra income is 'guaranteed.'
- Bank Statements: To show the net pay landing in your account matches your payslips.
Why Timing Matters
If you have just had a bumper month of commission or a large annual bonus, it may be the best time to apply. Conversely, if you have had a quiet quarter, it might be worth waiting until your 3-month average improves.
At The Mortgage Genie, we have access to over 90 lenders. We know which banks are currently 'hungry' for variable income cases and which ones have tightened their criteria following the 2026 FCA updates.
Pro Tip: Always check if your employer can provide a letter confirming that overtime or commission is a 'regular and expected' part of your role. This can sometimes sway a manual underwriter in your favour.
My Perspective: What I Tell My Clients
When clients come to me with high commission or heavy overtime, my first task is to 'normalise' their income. I look for the 'steady state'—what you can realistically afford even if you have a slightly bad month. Lenders are looking for reliability. If we can show that your 'bad' months still cover the mortgage, the 'good' months become the icing on the cake for your application. Don't be discouraged if your own bank says no; their computer model might just be set to a default 50% haircut that doesn't reflect your reality.
— Matt
How We Can Help
Navigating the varying rules for remortgages or new purchases when your income isn't simple can be stressful. We provide expert advice to help you find the right lender for your specific income structure. To discuss your options and see how much you could borrow, contact our team today.