What is bonus income?

A bonus is basically income that is not part of your regular monthly salary. Many employees receive end of year bonuses or quarterly bonuses that does not form part of their ongoing pay. The bonus may be offered as a reward to an employee who consistently satisfies the Key Performance Indicators (KPIs) within a certain time frame.

However in some cases where an employee completes set tasks in a highly impressive manner then they may be rewarded with a bonus from their employer.

What do lenders think about bonuses?

Generally bonuses are reliant on the employees meeting the KPIs or targets set for them at the beginning of the year. If performance is good then bonuses are given out and awarded however if the performance of the employee is unsatisfactory then no bonuses are given out.

In some cases employers simply don’t pay the bonuses that they have promised, or they move the goal posts making the targets effectively impossible to reach.

Because of the fact that bonuses are based on the employee’s overall performance and they are often paid at the employer’s discretion, it becomes difficult for the banks to consider these bonuses in their assessment. In comparison to a regular monthly salary, bonuses are a very unreliable and unpredictable measure of consistent income.

In addition to these already mentioned facts, many bonuses are not paid monthly, but rather annually or quarterly so this does not help people to pay their bills on a day to day basis.

Which lenders can help?

Generally some banks tend to be better at understanding bonus income when compared to other lending institutions as they are more flexible in their assessment of different types of income. Enquire online to speak with a mortgage broker that specialises in lending to people who receive regular bonuses as part of their employment package and knows which lenders can approve your loan!

How do lenders assess your bonus income?

The way bonus income is assessed will vary across all lenders where each lender will require you to provide them with their own list of supporting documents as evidence of your bonus income.

Most lenders will require some or all of the following tax returns:

• Two current consecutive payslips
• Letter of entitlement from your employer
• Your most recent tax return or group certificate

Depending on the lender they may be able to use up to 100% of the bonus income in their assessment. On the other hand there are lenders who will consider only 50% of your bonus income when assessing your home loan for approval.

Enquire online and one of our specialist mortgage brokers can help you find a lender who can take bonus income into consideration when they assess your home loan application.

Who is this loan for?

A bonus income home loan is for employees who receive regular, consistent and reliable bonuses throughout the year. The banks include the bonus income in their assessment of the home loan application where the amount of loan that they will approve may depend on these bonus figures. If you receive annual or quarterly bonuses then we may be able to get a lender to assess 50% to 100% of your bonus income.

Which loan types are available?

All loan types: Professional packages, basic loans, lines of credit, fixed rates.

How much can I borrow?

You can borrow up to 95% of the property value.

What can I use the loan for?

Home or domestic use, investing, purchases, refinances and construction are all acceptable loan purposes.

Discounts

Professional package and basic loan discounts are available.

Loan features

All loan features: Interest only, fixed rate, line of credit, 100% offset, redraw, extra repayments.

Apply now for a home loan using your bonus income

Enquire online to get more information on getting a mortgage that considers your bonus income as part of the assessment. We have connections with a considerable number of banks and lenders who can provide you with a home loan at affordable rates.