Many people seeking mortgages don’t fit neatly into the “standard employed” box.
Perhaps you’re self-employed, work on contracts, receive commission, or have multiple income streams?
If so, you might worry that getting a mortgage could be harder for you than for someone with a straightforward PAYE job.
This concern is valid as high street banks do prefer simple, predictable income patterns. Their automated systems can struggle with anything that falls outside usual patterns, leaving you feeling stuck or discouraged.
But here’s the good news: simply having a complex income doesn’t mean you can’t get a mortgage.
Plenty of specialist lenders and mortgage products cater specifically to people like you and with the right approach and preparation, you can still secure competitive rates.
This guide will walk you through everything you need to know about getting a mortgage with a complex income in today’s market.
What Makes Your Income ‘Complex’
When mortgage lenders look at your application, they’re trying to answer one key question:
“Can this person afford to repay the loan consistently over many years?”
For people with a regular salary from one employer, this assessment is relatively straightforward. But more and more people earn money in ways that aren’t so easy to evaluate.
A complex income simply means your earnings don’t come from a single, stable source in fixed amounts. From a lender’s viewpoint, this can make your financial situation harder to assess and slightly less predictable.
- Lenders prefer simple income structures because they’re easier to verify and forecast.
- A stable job with a steady salary suggests reliability – the cornerstone of mortgage lending.
- Complex incomes require more careful checking to ensure they’re sustainable over the long term.
Does having a complex income make getting a mortgage harder?
Not necessarily harder, but it does mean you’ll need to provide more evidence and possibly consider a wider range of lenders.
Understanding Different Types of Complex Income
Sometimes the ‘complex’ nature of your income could be one of these, but we find that many borrowers have multiple streams of income.
Self-Employment Income
Self-employment is perhaps the most well-known form of complex income. This covers sole traders who keep all their business profits, limited company directors who might take a small salary plus dividends, and business partners whose income depends on their share of profits.
Contract Work
If you work on fixed-term contracts, perhaps in IT, education, or healthcare, lenders need to assess how likely it is that you’ll continue to secure new contracts when current ones end.
Variable Employee Income
Many employees receive a basic salary topped up with commission, overtime, or bonuses. While the base salary is easy to assess, the variable elements need careful consideration – are they guaranteed? How consistent are they?
Multiple Income Sources
This might include combining part-time employment with freelance work, or perhaps you have a day job but also earn money from a side business. Entrepreneurs tend to have multiple businesses or companies. Each stream needs separate verification.
Investment and Rental Income
Income from shares, property rentals, or other assets forms another category. Lenders look at the history of returns and the security of the underlying assets.
Foreign Currency Earnings
International income brings additional complications due to exchange rate fluctuations. This affects British expats working abroad or those with international income streams.
Benefit and Maintenance Payments
Some people receive maintenance payments or certain benefits that can count toward mortgage affordability. Lenders check how secure these payments are and how long they’ll continue.
Some income types are viewed more favourably than others.
Generally, the longer your track record and the more consistent your income, the better. Employment income usually appears more secure than self-employment to lenders, but even variable income can be acceptable if you can show a good history.
How Do Lenders Evaluate Your Complex Income?
Lenders use different methods to work out how much you can borrow, but most follow similar principles.
They’ll look at your income, outgoings, and credit history to determine what you can afford to repay.
For complex incomes, lenders often calculate an average based on your recent earnings history. Self-employed applicants might need to provide two years of accounts, with lenders using an average figure or sometimes just the most recent year.
High street banks rigid criteria and automated systems that can struggle with non-standard incomes.
Thankfully, specialist lenders use more flexible, human-based underwriting that can better account for your unique circumstances.
How Much of Your Income Will Count?
Different income types are treated differently:
- With guaranteed basic salaries, lenders count 100% of the amount
- For regular commission, they might count 50-100% depending on consistency
- With annual bonuses, they often take 50-75% of the average
- For company directors, lenders use salary plus dividends, while some might also look at your share of retained profits
Most lenders will let you borrow between 4 and 5 times your provable income, though some go up to 5.5 times for higher earners, professionals or those with spotless credit records.
Track Record
The length of track record required varies by income type.
Self-employed applicants might need 1-2 years worth of accounts, while someone with variable income like commission might need 6-12 months of payslips to establish a pattern.
For limited company directors, some lenders only look at salary and dividends drawn from the business, while more specialised lenders can consider your share of retained profits too, potentially allowing you to borrow more.
Smart Steps to Strengthen Your Situation
Most situations that require applying for a mortgage can benefit from little bit of planning and organisation.
We call this getting ‘mortgage ready‘.
Preparation makes all the difference when applying with a complex income. Start getting ready at least 3-6 months before you plan to apply – this gives you time to organise finances and address any potential issues.
Speaking to a mortgage broker as early as you can will help a lot, as they will be able to suggest ways to improve your chances.
Review Your Income Structure
If you’re self-employed, speak with your accountant about your plans.
While minimising tax is usually a (good) priority, showing higher income in the year before applying will help your mortgage chances. For limited company directors, consider whether taking a higher salary or dividends might improve your application.
Boost Your Credit Profile
Your credit score matters enormously when applying for a mortgage.
Check your credit reports with the main UK agencies (Experian, Equifax, and TransUnion) to spot and fix any errors. Paying down existing debts and making sure all bills are paid on time will help boost your score.
Consider Your Deposit Size
Deposit size can significantly impact your options. While some lenders offer 95% mortgages even for complex incomes, having a larger deposit (20-25% or more) opens up more competitive deals and might help overcome income concerns.
If you can manage 40% or more, you’ll access the very best rates available.
Keep Finances Organised
Keep personal and business spending separate if you’re self-employed. Clean, well-organised bank statements help underwriters assess your finances more easily.
Time Your Application Carefully
If you know your income is about to change – perhaps you’re switching from employment to self-employment or expecting a big commission payment – think carefully about timing.
It’s often better to apply before such changes or wait until you’ve established a track record in the new arrangement.
Avoid making major financial changes just before applying, such as taking on new loans or credit cards, changing jobs, or making unusual large purchases.
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Mortgage Lenders That Welcome Complex Incomes
Many building societies will take a more personal approach to lending, considering complex income cases on their individual merits rather than applying rigid rules.
Their mutual status often allows for more flexible assessments.
But it is specialist lenders that really stand out in these situations.
These lenders focus specifically on areas that mainstream lenders find difficult, including complex incomes and multiple streams of income.
They employ expert underwriters who manually assess applications rather than relying on computer algorithms. These lenders don’t always advertise directly to consumers, often working primarily through mortgage brokers.
The right lender for you depends on your specific circumstances. Factors like the type of complex income, your deposit size, property type, credit history, and how much you need to borrow all affect which lender might be most suitable.
Using a whole of market mortgage broker will allow you to access these specialists.
Why a Mortgage Broker Is Your Secret Weapon
Using a mortgage broker can be particularly beneficial if you have a complex or unusual income set up.
Brokers see numerous cases like yours every week and develop specialised knowledge about which lenders are most likely to approve your application.
Access to More Options
While you might know of 5-10 mortgage providers, a good broker has access to over 120, including specialist lenders that don’t deal directly with the public. This broader range of options is especially valuable for complex cases.
Expert Knowledge
Brokers understand each lender’s specific criteria and preferences. They know which lenders will accept one year of accounts for self-employed applicants, which ones consider retained company profits, and which are most flexible about variable income.
Presenting Your Income Effectively
Presenting your income in the right way makes a huge difference. Brokers know exactly how to package and explain your finances to highlight strengths and address potential concerns before they become objections.
Managing the Application Process
The application process for complex income mortgages often involves more back-and-forth with the lender. Brokers manage this communication, responding to additional information requests promptly and professionally.
Can a Mortgage Broker Get You a Better Mortgage Deal?
With so many mortgage products available, finding the best deal yourself is nearly impossible. Read on to learn how mortgage brokers work and how they look after their clients.
Taking the Next Step
Getting a mortgage with a complex income is absolutely possible with the right approach.
While you might face some additional hurdles compared to someone with a simple employment situation, many lenders are willing to consider various income types.
Contact a mortgage broker with experience in complex income cases. Their knowledge of which lenders might accept your specific situation will save you time, stress, and potentially money too.
Begin your preparation well before you want to apply – ideally 3-6 months ahead. This gives you time to address any issues and maximise your chances of approval.
Call us on 0330 030 5050 to be matched with a mortgage expert.
Frequently Asked Questions
Complex income includes self-employment (sole traders, limited company directors), contract work, commission or bonus-based pay, multiple income sources, rental income, investment returns, foreign currency earnings, and certain benefit or maintenance payments.
Essentially, it’s any combination of income that doesn’t come from a single, stable PAYE job with a fixed salary.
Not necessarily. Interest rates depend on multiple factors including your deposit size, credit score, and overall financial situation. While some specialist lenders have slightly higher rates, many offer competitive deals comparable to standard mortgages, especially if you have a good deposit and can demonstrate income stability.
Yes, but how lenders assess your income varies. Some only consider salary and dividends taken from the business, while others may include your share of retained profits. Specialist lenders often have more flexible approaches for company directors, potentially allowing you to borrow more than with high street banks.
Lenders will consider foreign currency income but will often apply a ‘haircut’ (reduction) to account for exchange rate fluctuations – typically 10-25%. You’ll need to provide evidence of the income such as contracts, payslips, and bank statements. Some specialist expat mortgage lenders are more flexible with foreign currency earnings than high street banks.
Possibly. There will inevitably be additional information requests from the lender, and this will add to the processing time. Speaking to a broker early on should allow you to get more organised and anticipate some of the requests.
So this will vary according to your own situation.
Typically, you’ll need SA302 tax calculations and tax year overviews from HMRC (usually for the last 2-3 years), full business accounts prepared by a qualified accountant, and business bank statements. Limited company directors may also need to provide company accounts and corporation tax returns.
