Lenders regard bonus income as a very unreliable and unpredictable measure of consistent income in comparison to regular monthly salary. However, each lender may have a different policy for how they will assess bonus income.
Some lenders assess more leniently and consider bonuses as a stable form of earnings while other lenders don’t consider income from bonus altogether while calculating your borrowing capacity. This is because these forms of earnings are mostly based on the employee’s overall performance and is often paid at the employer’s discretion.
The consistency and the frequency of the bonus payment may largely determine whether the lenders will accept the bonus income or not such as:
- Monthly or quarterly bonuses: One of our lenders can accept 100% of your bonus if it is regularly paid. Also, you have to provide a letter from your employer confirming that the payment is regular and ongoing.
- Annual bonuses: One of our lenders may accept 100% of your annual bonus however you will be required to provide evidence of a two year history of your earnings in order to prove that this income is ongoing.
- Performance based bonuses: These bonuses may be included in your assessment depending on the regularity of your bonus receipt in the past and for how long you have been receiving them.
- Irregular bonuses: If your bonus is irregular then it will be assessed on a case by case basis.
- One off bonuses: One-off bonus income isn't usually included as part of your additional income.
Please enquire online or call us on 1300 889 743 and know how much of your bonus income will be accepted by the banks and which institutions are likely to lend.
Cheers,