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Proving Your Income for a Mortgage Application

If you have a drawer full of payslips and bank statements, it's pretty easy to prove your income! Otherwise, this guide shows you a few handy ways to evidence your earnings to help your mortgage application progress successfully.

Prove Your Income Before You Apply For a Mortgage

One of the tricky parts of a mortgage application for many people is proving how much they earn.

Let's consider what proof is deemed acceptable by mortgage lenders, depending on your employment type.

For further assistance with the mortgage application process, contact Revolution Finance Brokers on 0330 304 3040, or message us at [email protected].

How Can I Prove My Income for a Mortgage Application?

Lenders have different policies on what sort of proof they will require. The typical requirements include:

  • P60s for the last two years and three months of payslips for employed applicants.
  • A contract of employment, mainly if you are in a new role.
  • Self-employed accounts and/or SA302 tax returns for contractors and self-employed people. Some lenders also require an accountant's reference or signed reports.
  • Bank statements, usually for at least the last three months.

How Much of My Income Is Included in a Mortgage Calculation?

You might earn your income in many different ways, and how much of that income a lender will consider in their affordability calculation depends on their policies.

Average policies are as below:

Type of income

Typical assessment basis

Employment salary

Usually 100%

Self-employed net profits

Usually 100%

Variable income - such as overtime, bonuses and commissions

0 - 100%

Pension earnings

Usually 100%

Grants or bursaries

0 - 100%

Stipends

0 - 100%

Benefits - such as tax credits or child benefit

0 - 100%

International income

0 - 100%

How Can I Prove My Bonuses Income on a Mortgage Application?

Variable income such as bonuses usually requires payslips, with an itemised line showing the value.

Lenders can have very different approaches to commissions or bonuses. Some will include 100% of the value, adding them to your primary salary. Others won't include bonuses at all, and some will include them, but only up to 50% of the average value.

Can I Use Benefit Income Towards Mortgage Affordability?

Again, it depends on the lender. Some will refuse to use any benefit income in your mortgage application assessment, and others will include 100% of benefit earnings.

Of those lenders who do, you can usually include:

  • Child tax credits and working tax credits.
  • Child benefits.
  • Disability living allowances, incapacity benefits and industrial injuries benefits.
  • Attendance allowances.
  • Pension credits.
  • Maternity allowances.
  • Widow’s pensions.
  • Carer’s allowances.

If you receive child maintenance income, you will usually need to provide a court order evidencing that the payments will continue to be paid.

Most other benefits can be proven through bank statements and a payment schedule from the local authority.

How Can a Contractor Prove Their Income to Get a Mortgage?

Contractors will usually be asked to provide copies of their work contracts.

If you work on a short term basis with your clients, then a lender might want to see bank statements, tax returns and accounts showing your income over two years. Some lenders will accept one year's worth of trading history.

What Can I Do To Prove My Self-Employed Income?

Usually, you'll be asked to provide:

  • P60 forms or payslips.
  • Pension statements or benefit schedules.
  • Tax returns and/or filed accounts.

If you are self-employed as a limited company director, it might be a little trickier. Your payslips and bank statements will only show the salary you have paid yourself and dividends taken at the end of the year.

Some lenders will include retained profits left in the business, in which case you will need to provide copies of filed accounts, often only those verified by an independent accountant.

Can I Get a Mortgage If I Cannot Prove my Earnings?

Generally, no. Self-certified mortgages are now banned.

What Income Proof is required for a Buy to Let Landlord?

Many UK mortgage providers prefer landlord applicants to have a minimum annual income, often around £25,000. You can prove your income through tax returns and filed accounts.

There are some circumstances where you can get a buy to let mortgage without proving your income. Usually, that applies when you have other capital funds, such as a redundancy payment or an inheritance.

You will need to provide evidence of these funds, such as a bank statement or confirmation of the transfer.

Help With Proving Your Income for a UK Mortgage Application

If you are struggling to demonstrate your income or have multiple earning streams and need help finding the most competitive mortgage rates, get in touch.

Our mortgage advisors team are experts in mortgage applications and negotiating rates and terms on behalf of our clients. Give us a call on 0330 304 3040, or drop a message to [email protected] at any stage of the mortgage application process.

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