Overtime income home loan
How do lenders view overtime income?
Lenders often do not consider overtime income when they assess a home loan.
However, in some cases they will require you to provide them with evidence of your long hours for a year or even for two years.
If they see that your overtime income is regular and substantial then they may consider 50% of that overtime income when assessing your loan.
Will the banks accept 100%?
In cases where your field of work is classified as an essential service, some banks and lenders may consider 100% of your overtime income as part of their assessment.
These essential services are:
- Healthcare (in particular, if you are a nurse, overtime income is readily accepted)
- Police, Fire and Rescue
- Emergency Services
- Education
Don’t worry! There are some lenders that can consider accepting 100% of your overtime even if you aren’t working in essential services.
Please enquire online or contact us on 1300 889 743 to talk to a mortgage broker about your overtime income.
What do i need to provide?
Most lenders require:
- a letter from the employer confirming that you have received overtime income for the past one or two years
- two recent payslips
- your most recent group certificate
The banks will then accept the lowest income proven by those three documents.
If you would like an employment letter template please contact us on 1300 889 743 or enquire online and our mortgage brokers will provide you with one.
What if I can only provide payslips?
Whilst it is recommended that you aim to supply as many documents as you can, each lender has different guidelines.
Some of our lenders only need two recent payslips and will then use the Year To Date figure on your payslips to calculate your annual gross income.
Please enquire online or call us on 1300 889 743 to speak with a mortgage broker that specialises in lending to people who have overtime income as part of their regular employment package.
You can use the YTD Calculator on our website to find out how the banks will assess your income.
What factors do banks take into account?
Generally for overtime income earners, the loan applications will be assessed on a case by case basis.
This is because the stability of overtime hours worked differs across all applicants depends on factors such as:
- the type of employment they are in
- the industry they are in
- the number of regular hours they work in a week
- the length of time they have been in their current job for
There are lenders who will consider your overtime income if you are no longer on probation and you have evidence of consistency in the overtime hours that you work.
To discuss your situation with our mortgage brokers please enquire online or call us on 1300 889 743 today. Our expert team will help you get approval.
Will i get approval?
Our best lenders can accept:
- Minimum length of employment: 3 month history of receiving overtime.
- Maximum amount of overtime accepted: 100% up to a maximum of 70 hrs / week in total hours worked.
- Consistency: We have lenders that accept either a group certificate, YTD income figure or 3 months payslips as evidence of your overtime. This way we can present your loan to a lender that can work with the evidence you can provide.
- Industry: All industries accepted including mining, fork lift drivers, trades, construction, nurses, IT, finance industry employees and hospitality.
If you work in any of these industries and want to make your overtime income count in a serviceability assessment, please enquire online or contact us on 1300 889 743.
Which lenders can help?
Typically banks tend to be better in understanding overtime income when compared to other lending institutions.
However each bank will still have a different set of guidelines and requirements when they assess your loan.
We have access to several lenders who are willing to take your overtime income into consideration when assessing your home loan for approval.
If you have received overtime income for a minimum of three months then we can help you find a lender or bank that would be willing to consider this income for the assessment of your home loan application.
What is overtime income?
Overtime income is paid in addition to your normal base wage when you work more hours than you are required to.
In general the overtime that you work may vary from week to week, but it can be somewhat consistent for those who work in healthcare, law enforcement or a variety of other industries.
If working overtime is a condition of your employment then the income from your extra hours is just as regular and stable as your base wage.
Why are lenders so conservative?
Lending institutions are generally conservative when assessing your overtime income because the payments are generally irregular.
As a result of this, the lenders are trying to avoid the risk of getting your home loan approved and then running into trouble when you are suddenly no longer required to work overtime or work late by your employer.
When this happens there is a high chance that you can no longer make the required repayments on your mortgage.
Please enquire online or contact us on 1300 889 743 to find out which lender can help you get a home loan approved with overtime income as part of their assessment.
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 90% of the property value and possibly 95% for very strong applicants.
What can I use the loan for?
Home or domestic use, investing, purchases, refinances and construction are all acceptable loan purposes for an overtime income home loan.
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 for a home loan with overtime income
If you think that your overtime income is regular and consistent enough for you to get a home loan approval then please enquire online for more information.
