Bonus - how will lenders assess my income?

Discussion in 'Loans & Mortgage Brokers' started by MRO, 11th Jul, 2019.

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  1. MRO

    MRO Well-Known Member

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    18th Jun, 2015
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    Perth
    I receive a reasonable salary and have been employed for just over two years now in an executive role. My employer prefers to pay me an annual bonus rather than increase my salary. This is not my preference but that is how it is at the moment.

    For the last two years i have received a bonus equal to approximately 10% of my salary. I am not looking to re-finance at the moment but am keen to understand how the major lenders would treat that bonus in assessing my servicing capacity. Currently i have loans with St George and NAB.
     
    MRO, 11th Jul, 2019
    #1
  2. Simon Moore

    Simon Moore Residential & Commercial Mortgage Broker Business Member

    Joined:
    4th Mar, 2016
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    Location:
    Level 2 287 Collins St Melbourne VIC 3000
    Depends on the lender, generally, they will only accept 80% of bonus income and will need two years payment history, but some will take 100%.

    It could be:
    1. Take most recent year
    2. Take most recent year if <20% increase year on year
    3. Take the lower of the two years
    4. Take an average of two years if the most recent year is higher
    5. And probably some other combinations that I can't think of right now.
     
    Last edited: 11th Jul, 2019
    Simon Moore, 11th Jul, 2019
    #2
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  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Location:
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    Your existing funders will typically take 80 % of the lower of 2 years, exceptions do apply

    ta
    rolf
     
    Rolf Latham, 11th Jul, 2019
    #3
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