Using Bonus or Overtime Income for a Mortgage: How Do Lenders View It?
- Christina Vassiliades
- Oct 10
- 5 min read
Updated: Oct 29
Last updated: 10 October 2025
Yes, bonus and overtime income can often be included in a UK mortgage assessment, but how much is accepted depends on consistency, documentation, and the lender’s policy.
If your overtime or bonus payments appear regularly on payslips and have been received for two or more years, many lenders may consider a percentage of that income. Some may take 100% of guaranteed overtime, while others only accept 50% of irregular bonuses. Lenders typically ask for payslips, P60s, and sometimes an employer’s confirmation to verify track record.
Specialist intermediary lenders are often more flexible, though acceptance is never guaranteed. Using a broker helps because they know which lenders take a pragmatic approach to variable income. At Manor Mortgages, we frequently help clients who rely on bonuses and overtime. With three decades of expertise, we understand the nuances of affordability checks and how to position applications so that income is given proper weight.
Table of Contents
What is bonus or overtime income?
Why variable income matters more in 2025
How UK mortgage affordability is calculated
Do lenders accept overtime income?
Do lenders accept bonus income?
How much of your bonus or overtime is usually counted?
The lender acceptance spectrum explained
Policy exceptions: when criteria may be waived
Case study: Overtime turning the tide for borrowing power
Buy-to-let and investor considerations
What surveyors and underwriters really look for
Pros and cons of relying on bonus or overtime income
Common mistakes applicants make
Impact on mortgage timescales
Hidden costs people forget when using variable income
Market trends: what’s changed in the last 12 months
Expert tips and broker insights
FAQs
Glossary of key terms
Checklist: Questions to ask before applying
Conclusion & next steps
1. What is bonus or overtime income?
Bonus income refers to performance-related or contractual payments, usually paid annually or quarterly. Overtime income is extra pay for working hours beyond contracted limits. Both fall under variable income, as they are not guaranteed in the same way as base salary.
2. Why variable income matters more in 2025
With rising living costs, more than 40% of UK employees now earn additional income through overtime or bonuses (source: ONS labour statistics). This means affordability assessments are no longer realistic if they ignore variable income. In 2025, specialist lenders increasingly recognise this trend, although criteria remain strict.
3. How UK mortgage affordability is calculated
Lenders must follow the FCA’s responsible lending framework. Affordability checks look at:
Gross annual income (base plus accepted variable pay)
Debt-to-income ratio
Household outgoings
Stress tests to model interest rate rises
For applicants with overtime or bonus pay, underwriters often average income across 3, 6, or 12 months.
4. Do lenders accept overtime income?
Yes. Guaranteed overtime written into a contract is usually fully counted. Regular overtime seen across multiple payslips may be partially counted. Irregular overtime is often discounted or only considered at 50 percent.
5. Do lenders accept bonus income?
Yes, but with caveats. Bonuses are harder to evidence because they’re not always regular. Most lenders want at least a two-year history of bonus payments to consider them reliable. Annual one-off bonuses are rarely counted in full.
6. How much of your bonus or overtime is usually counted?
7. The lender acceptance spectrum explained
Think of lenders on a spectrum:
Conservative lenders: Count only base salary
Mainstream lenders: Count part of regular bonus/overtime
Specialist intermediary lenders: More flexible if evidence is strong
8. Policy exceptions: when criteria may be waived
Some lenders may make exceptions if compensating factors exist, such as:
Large deposit reducing risk
Low loan-to-value
Strong credit profile
Stable employer in a growth sector
9. Case study: Overtime turning the tide for borrowing power
One Bristol-based client earned £34,000 base with £10,000 overtime annually. Initial calculations ignored overtime, limiting their mortgage size. By presenting 18 months of payslips, a broker secured a lender willing to include 75% of overtime, boosting borrowing power by £40,000.
10. Buy-to-let and investor considerations
For buy-to-let, rental income is the primary driver. However, top-slicing means lenders may use personal income to cover affordability shortfalls. Here, overtime and bonuses may make the difference between an approval and a rejection.
11. What surveyors and underwriters really look for
Consistency across payslips
Evidence on P60s and tax records
Employer confirmation if needed
Avoidance of one-off spikes
12. Pros and cons of relying on bonus or overtime income
Pros
Higher borrowing capacity
More realistic reflection of true income
Cons
Greater scrutiny and longer processing times
Risk if overtime or bonuses reduce in future
13. Common mistakes applicants make
Assuming all variable income counts
Not keeping payslips
Relying on one-off annual bonuses
Applying direct without understanding criteria
14. Impact on mortgage timescales
Expect longer underwriting times if variable income is central to your application. More documentation requests and employer checks can delay approvals.
15. Hidden costs people forget when using variable income
Higher valuation fees if multiple valuations required
Extra solicitor queries if income is disputed
Delays leading to expired product offers
16. Market trends: what’s changed in the last 12 months
Since mid-2024, more applicants rely on variable income as inflation squeezes fixed pay. Specialist lenders are increasingly used, as high street banks remain more cautious.
17. Expert tips and broker insights
Always supply at least 3–6 months’ payslips, preferably 24 months for bonuses
Keep P60s for proof of historical earnings
Avoid gaps in overtime evidence
Use a broker who knows which lenders accept variable pay
18. FAQs
Q: Do all lenders treat overtime the same?
No, it varies widely.
Q: Can annual bonuses be used?
Sometimes, but usually not in full.
Q: What proof do I need?
Payslips, P60s, and employer letters.
Q: Does this apply for remortgages?
Yes, same principles.
Q: Are specialist lenders more flexible?
Often, but not always.
19. Glossary of key terms
Variable income: Income not guaranteed each month
Underwriting: Risk assessment process
Top-slicing: Using personal income to support rental affordability
20. Checklist: Questions to ask before applying
How much of my overtime will you count?
Do I need two years’ bonus history?
Which documents do you need?
How long will it take to assess?
Which lenders are flexible with my income type?
21. Conclusion & next steps
Bonus and overtime income can strengthen a mortgage application if consistent, provable, and well-documented. But the way it’s treated varies hugely across the lender spectrum. A broker bridges this gap, knowing where flexibility exists and how to present an application.
At Manor Mortgages, we have decades of experience helping clients with variable income secure the right mortgage. Get in touch today on 01275 399299 to discuss your options.
Written by Ben Stephenson, CeMAP-qualified Mortgage Broker. Reviewed by Mortgage Experts. Manor Mortgages is FCA authorised (496907) and has been serving clients for nearly 30 years. With a 4.9 Google rating and thousands of successful applications, our Bristol-based team supports homeowners and buyers nationwide.