• Typical mortgage products allow 50% of average bonus pay to be added to annual income for mortgage affordability tests
  • But bonus-friendly products will allow 100% of average bonus pay to be considered
  • For marketing and sales directors – who have the highest bonuses of £14,448 – opting for a bonus-friendly mortgage could enable them to borrow up to £33,000 more

Workers who received a Christmas or New Year bonus and are looking to purchase a property in 2020 could boost their borrowing power by up to £33,0001, simply by selecting a mortgage product with more bonus-friendly criteria, new analysis from independent mortgage broker Private Finance reveals.

Mortgage products take bonus pay into account in varying degrees. Generally, 50% of the average bonus pay received over the past two years can be added to borrowers’ salaried income when making affordability calculations. However, some products – such as those offered by Metro Bank [KC1] – will accept 100% of the average over the past two years. This can make a significant difference to the amount buyers can borrow, particularly when they receive higher bonus payments.

According to the Office for National Statistics (ONS), sales and marketing directors receive the highest median bonuses, at £14,448 on top of their annual income of £75,184. Based on these figures, an industry standard mortgage product would allow a single buyer to borrow up to £370,836. However, a mortgage with more bonus-friendly criteria would allow the same buyer to borrow up to £403,344 – a difference of £32,508 or 9%.

Even the average UK worker – who receives a typical annual income of £24,897 and bonus pay of £1,329 – could add £3,000 to the amount they can borrow (up from £115,027 to £118,017), which might make the difference of being able to afford their preferred home.

Similarly, workers in the City of London – who receive average bonuses of £8,391 on top of an annual salary of £58,168 – could borrow £299,462 instead of £280,582 by opting for a bonus-friendly product: a difference of £18,880 or 7%.

Borrowing power of the top five occupations with the biggest bonuses

Bonus Pay (median) Annual Pay (median) Borrowing power – average Borrowing power – bonus friendly Difference
Marketing and sales directors £14,448 £75,184 £370,836 £403,344 £32,508
Financial managers and directors £9,166 £60,186 £291,461 £312,084 £20,624
Functional managers and directors £8,229 £57,581 £277,630 £296,145 £18,515
Sales accounts and business development managers £5,817 £45,305 £216,961 £230,049 £13,088
Production managers and directors in manufacturing £5,000 £42,354 £201,843 £213,093 £11,250


Shaun Church, Director at Private Finance comments:

“Mortgage lenders can be reluctant to include bonus payments in affordability calculations as generally, they’re not guaranteed, and the amount can vary significantly from year-to-year. However, for those in high-paid professions where bonus pay is not just common but expected, it can form a significant chunk of their finances and make a real difference in terms of the type of property they can afford to purchase.

“Those who do receive regular bonuses should seek the help of an independent mortgage broker when financing a property purchase. A broker can identify the most suitable products with bonus-friendly criteria as well as competitive rates, helping to unlock a whole new realm of potential homes.”

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1 Average (median) bonus pay and annual income from Office for National Statistics Annual Survey of Hours and Earnings (Tables 7.8a, 14.7a and 14.8a). Borrowing power calculations based on 4.5 x total income (salary plus 50% / 100% of bonus pay).



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