Mortgage calculator

cmbrookes

So I’m trying out various mortgage lenders and calculating to see what they might lend me. How do the lenders calculate if you can afford the mortgage based on your regular over time worked? because most of the calculators on their website asks for your it annually but then I know that when you actually apply for a mortgage they only use and look at your last three months pay slips.

kingstreet

It's averaged and annualised and usually around 50% taken.

cmbrookes

kingstreet said:

It's averaged and annualised and usually around 50% taken.

Sorry but when you say 50% taken, do you mean they half the total of your over time that you earn annually? If so why is this?

aoleks

Income lending criteria | Nationwide for Intermediaries (NFI) (nationwide-intermediary.co.uk)

Every lender has an intermediary website, which brokers use. Calculators are accurate to the penny and they allow you to calculate affordability to the penny without touching your credit score. There is also documentation on what's accepted as income, including overtime.

The one above is an example, google "lender + intermediary" for other banks (e.g. HSBC intermediary).

kingstreet

cmbrookes said:

kingstreet said:

It's averaged and annualised and usually around 50% taken.

Sorry but when you say 50% taken, do you mean they half the total of your over time that you earn annually? If so why is this?

... because it's variable and may not be guaranteed so it doesn't get the same treatment as basic or an allowance which sees the same amount paid each month. You enter the annualised OT in the correct box and the lender's calculator will treat it as it should. You don't half it yourself!

kingstreet

Some lenders may take more overtime, bonus or commission into account based on the evidence you can provide. For example, if you show this over a year or two, a few lenders will take 100% into account.