How Do UK Lenders Treat 100% Commission Income on a Mortgage in 2026?
- 9 hours ago
- 8 min read
100% commission income is harder to evidence than salaried pay but worth significantly more borrowing power when you get the approach right. Here is what UK lenders actually do with commission earnings in 2026, which lenders accept the full amount, and how to present your income so an underwriter does not haircut it.
Quick Answer
Most UK lenders accept commission income, but only a small group take 100% of it for affordability. The majority average your last 12-24 months' commission and apply a haircut, typically 50% to 80%. Specialist lenders take 100% with at least one full tax year's evidence and a stable trend.
Reviewed by Ben Stephenson, FCA authorised (FRN 496907) · 25+ years' experience · 4.9★ on Google. Updated: 12 May 2026.
Who Is This Guide For
Aimed at commission earners weighing how much they can realistically borrow. Specifically:
Senior sales professionals in recruitment, FX, enterprise SaaS, fintech, pharma, real estate
High earners on a small base salary with the majority of income from commission
Mortgage advisers, financial advisers, and brokers paid on production splits
Anyone where 50%+ of total annual income comes from commission, OTE, or production splits
Key Points
Most mainstream lenders haircut commission to 50-80%
Specialist lenders accept 100% with one year's evidence
Declining trend caps your income at the lower figure
On this page
What lenders mean by '100% commission income'
When lenders say 'commission income' they typically mean any income paid as a percentage of revenue you personally generate, separate from your fixed salary. According to the FCA Mortgage Conduct of Business sourcebook (MCOB 11.6), the lender must consider commission to the extent that it is reasonable to expect it to continue. That single phrase, reasonable to expect, is what every underwriter is testing when they look at your payslips.
In practice, three structures all fall under the commission umbrella for UK affordability purposes:
100% commission: no base salary at all (or a small drawdown that is reconciled back against commission). Common in self-employed brokers, recruitment consultants on a draw-and-recover scheme, some sales floors.
Heavily commission-weighted: a small base salary (£20,000-£40,000) with the majority of total earnings coming from monthly or quarterly commission. Common in enterprise SaaS, FX trading desks, pharma reps, financial advisers.
Bonus-style commission: a meaningful base salary plus quarterly or annual bonus tied to performance. Not strictly commission but lenders often treat it identically. See our guide on using bonus or overtime income for a mortgage for the bonus angle.
The distinction matters because some lenders that decline pure 100% commission will accept a heavily commission-weighted structure, and vice versa. Knowing which category you fall into determines which lender panel to approach.
How lenders calculate your commission for affordability
Most lenders use one of three averaging methods. UK Finance (2025) reports that the choice of method shifts the borrower's affordability outcome by 15-25% on the same evidence, which is why selecting the right lender matters more than evidencing the same income twice.
Averaging method | When it favours you |
3-6 month payslip average | Recent run of strong months |
12-month payslip average | Steady year-over-year performance |
2-year P60 average | Long stable history; commission line on P60 understates current run |
Latest P60 only | Latest year is your strongest |
Lower of last two P60s | Always conservative; rare to favour you |
A typical lender's affordability engine takes the chosen average, applies an income multiple (commonly 4.5x to 5.5x), and produces a maximum loan figure. According to the Bank of England (Q1 2026) Mortgage Statistics, the median loan-to-income ratio for new mortgages sits at 3.4x; commission earners with a strong track record can often borrow at 4.5x or higher with the right lender match.
One common mistake: assuming that your highest-earning year is what lenders will use. Most prudent underwriters use the lower of your last two years, or apply a haircut on the higher year, specifically to absorb any future drop in commission. Lead with your evidence, not your aspiration.
What proportion of your commission counts: 50%, 80%, or 100%?
Different lenders apply different haircuts to your commission line. The market in 2026 sits across a spectrum:
Lender appetite | Commission percentage applied / when this fits you |
Conservative high-street | 50%; recent role change, single-employer concentration |
Standard high-street | 60-75%; stable 2+ year track record |
Commission-friendly mainstream | 80-100%; strong tenure, low monthly variance |
Specialist 100% commission | 100%; 1-2 years on current scheme, P60-evidenced |
Manual underwrite | Case-by-case 80-100%; niche structure, high earner |
The wrong lender can cost you £100,000+ of borrowing capacity on a £150,000 commission income. A specialist mortgage broker's job is to read your specific commission structure and route you to the lender most likely to take 100% of it. The biggest divider: whether the lender treats your commission as 'salary-equivalent' (averaged over 12 months and assessed annually) or as 'variable income with risk discount' (haircut applied for volatility). Salary-equivalent treatment unlocks the highest borrowing.
Declining commission trends: what they kill and how to evidence around them
If your last 12 months of commission is lower than the 12 months before, most lenders will use the lower figure, not the average. This is the single biggest haircut that catches commission earners out. According to the FCA Consumer Duty rules (2023), lenders must assess affordability conservatively, which in practice means lower-of-two-years treatment for any declining trend.
Three things you can do to mitigate a declining year:
Explain it in writing. A signed employer letter clarifying that the decline reflects a one-off (territory restructure, parental leave, lost-and-replaced major client) lets the underwriter consider context. Without context, the engine just takes the lower year.
Wait for a stronger quarter. If you applied tomorrow, the underwriter would average your last 12 months. Wait three months of strong commission and the rolling average lifts measurably. Time can be on your side.
Apply with a manual-underwriting lender. Algorithmic affordability engines see a declining trend and discount; a human underwriter can look at the reason. Specialist lenders cost slightly more in rate but unlock the borrowing that high-street algorithms refuse.
The biggest unforced error: applying to a high-street lender, getting auto-declined, then trying again three months later. The decline shows on your credit file as a hard search and tightens your file. Always know which lender you are applying to before you apply.
What the application paperwork actually looks like
A 100% commission income application is documentation-heavy. The standard pack:
12-24 months of monthly payslips, every one consecutively, with the commission line clearly itemised. Gaps in payslips are red flags that trigger manual underwrite.
Your last two P60s, evidencing total annual commission earnings as reported to HMRC. Some lenders treat the P60 line as gospel; others cross-check against payslip sums.
An employer letter on company headed paper, signed by HR or finance, confirming your role, your commission scheme structure (rate, target, frequency), and that your earnings are reasonably expected to continue. Most specialist lenders will not accept 100% commission without this letter.
Six months of bank statements showing the commission payments landing in your account, matching the payslips line by line. See our guide on bank statement red flags lenders look for for the patterns that get flagged.
Two years of self-assessment returns if you are taxed through self-assessment rather than PAYE (common for some commission structures). The lender will reconcile your declared income against your bank deposits.
The cleanest applications also include a one-page commission income summary prepared by the applicant or broker: monthly breakdown for the last 24 months, total annual figure, year-over-year comparison, and a brief note on any anomalies. This is not strictly required but it significantly shortens the underwriter review time and reduces follow-up questions.
Where 2026 is changing the rules for commission earners
Three meaningful shifts in lender behaviour through Q1-Q2 2026 are worth knowing about before you apply.
More lenders are accepting 100%. According to the FCA Mortgages Report (March 2026), specialist and challenger lenders have continued to broaden criteria on variable income, with a meaningful number now taking 100% of commission with a single P60 plus consistent payslips. Five years ago, this was effectively impossible outside of a manual underwrite.
Algorithmic affordability is getting better at variable income. The big high-street lenders' affordability engines have been retrained on broader commission datasets through 2024-2025, narrowing the gap between automated and manual underwriting. The practical effect: a strong commission earner now has a meaningful chance of an automated approval, rather than needing to start with a specialist.
Annual bonus is being separated from commission. Where lenders previously bundled commission and bonus into one variable-income line, several have started treating annual bonus separately, often taking 100% of average bonus alongside 80-100% of commission. This unlocks more borrowing for buyers with both income types.
The Financial Ombudsman Service has highlighted that lenders' treatment of variable income has been a growth area for complaints in 2025-2026, particularly where applicants believed they had been given clear pre-application affordability estimates that then changed at underwriting. The lesson for borrowers: get the affordability calculation in writing from your broker before you make any offer, and confirm the lender's commission treatment formula explicitly.
FAQs
Will lenders accept commission paid quarterly rather than monthly?
Yes. Quarterly commission is averaged exactly the same way as monthly, although you need more months of evidence to see a stable pattern. Most lenders expect at least 12 months of quarterly commission history.
Can I get a mortgage with only six months of commission income at a new role?
It is difficult on the high street. Most lenders want a full 12 months, ideally 24. Specialist lenders may consider six months if the role and industry match a previous role you held, or with a manual underwriter who can read the context.
Does an annual bonus count differently from monthly commission?
Yes. Annual bonus is typically averaged over the last two years and applied separately from monthly commission. Several lenders take 100% of average bonus where they only take 75-80% of commission, so the two streams can be more borrowing-friendly than one combined stream.
How is OTE (on-target earnings) treated compared to actual earnings?
Lenders use your actual earnings, not your OTE. The advertised £150,000 OTE means nothing to an underwriter if your actual P60 says £90,000 base plus £40,000 commission. Lead with what you have actually been paid.
What if my commission is paid via a draw-against-commission scheme?
Common in recruitment. Lenders are familiar with the structure but want to see the reconciliation: a clear monthly pattern showing draw paid out, commission earned, balance settled. As long as the net annual commission is consistent, draw-and-recover is acceptable to most lenders.
Can I use commission income for a buy-to-let mortgage?
Yes, for residential affordability purposes on a BTL where the lender stress-tests both personal income and rental coverage. The same commission averaging rules apply. Some specialist BTL lenders are more relaxed on personal income because rental coverage carries more weight.
Summary
100% commission income works for UK mortgages but requires lender selection and clean documentation. The cost of mismatching lender appetite is significant: between 50% and 100% of your commission counts, depending on who you apply to. Evidence matters more than headline earnings: 12 to 24 months of payslips, two P60s, an employer letter, and clean bank statements. Specialist routes exist for declining trends, new roles, and non-standard structures.
Updated: 12 May 2026
Written by Ben Stephenson, CeMAP-qualified Mortgage Broker, and reviewed by Mortgage Experts.
Manor Mortgages Direct is FCA authorised, FRN 496907. We are a UK-based specialist mortgage brokerage with 25+ years of experience helping homeowners, landlords, expats, and the self-employed across the full spectrum of mortgage scenarios, assisting clients nationwide.
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