Barclays has decided to include annual bonus income in mortgage affordability calculations for clients who meet its minimum basic income criteria.
The new bonus criteria will apply to sole applicants with a gross income of £75,000, excluding the annual bonus.
It will apply to joint applications where one one applicant has a gross income of £75,000 or the couple has joint gross income of £100,000, excluding the annual bonus.
Customers will be asked to provide their P60s for the past two years or their HMRC Annual Tax Year Overview and the latest bank statement.
The lower of the current year's bonus or the two-year average will be included in the affordability calculation
This new policy will apply to any existing pipeline deals that undertake a pre-contract variation.
These bonus changes do not apply to buy-to-let applications.
|
|
Scenario 1 Increasing bonus history |
Scenario 2 Declining bonus history |
Scenario 3 Bonus exceeds salary |
|
P60 2014 Income |
£105,000 |
£95,000 |
£235,000 |
|
P60 2013 Income |
£95,000 |
£105,000 |
£225,000 |
|
Salary (both years) |
£75,000 |
£75,000 |
£75,000 |
|
2014 bonus |
£30,000 |
£20,000 |
£160,000 |
|
2013 bonus |
£20,000 |
£30,000 |
£150,000 |
|
2 Year average bonus |
£25,000 |
£25,000 |
£155,000 |
|
BONUS AMOUNT FOR MAX INPUT |
£25,000 |
£20,000 |
£155,000 |
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