To include your commission income in a mortgage application, lenders require solid proof to verify that your commissions are consistent and reliable. The typical documents you’ll need to provide include:

• Payslips that clearly show your commission payments over the last two to three years. These demonstrate the regularity and amount of your commissions.

• P60 Forms which summarize your total annual earnings, including commissions, as reported to HMRC.

• Tax Returns may also be requested, especially if you receive commission payments through self-employment or a business.

• Employer Letter confirming your commission structure and history. This letter should explain how commissions are calculated, how often they are paid, and whether they are guaranteed or discretionary.

Providing complete and up-to-date documentation helps lenders accurately assess your commission income and can improve your chances of mortgage approval.

Lenders usually take a cautious approach when considering commission income because it can fluctuate. Typically, they will look at your commission earnings over the last two to three years and calculate an average to include in your overall income.

Depending on the lender and how consistent your commissions appear, they may accept anywhere from 50% to 100% of your commission income. If your commission payments have been steady or increasing, lenders are more likely to consider a higher percentage. Conversely, if your commission income has been irregular or recently changed, some lenders might discount the amount or exclude it entirely.

It’s important to note that the way lenders treat commission income can vary, so working with a mortgage advisor who understands these nuances can help you find the best deal.

Commission income can definitely impact how much you’re able to borrow when applying for a mortgage. Because commission payments can vary, lenders tend to be more cautious and will carefully assess the consistency and reliability of your commission earnings.

If you have a strong, consistent history of commission income, usually over the past two to three years, lenders are more likely to include it fully in their affordability calculations. This can increase your borrowing power and help you qualify for a larger mortgage.

However, if your commission income fluctuates significantly or is relatively new, some lenders may only consider a portion of it or exclude it entirely, which might reduce the amount you can borrow. A solid credit history, stable base salary, and a good-sized deposit can also improve your chances of securing a higher mortgage amount.