| Loan amount | £1,300,000 |
| Purchase price | £1,850,000 |
| Loan-to-value | 70% |
| Property type | Period family home |
| Location | Wandsworth, London (SW18) |
| Borrower | City professional |
| Term | 25 years interest-only |
| Rate | 5-year fixed |
| Lender type | Specialist bonus-income lender |
| Income | Base + 100% bonus accepted |
The Story
Fox Davidson was approached by clients looking to move home and upsize substantially.
They had a sale agreed on their existing main residence and had seen a property they liked, however, it was a considerable uplift in price to their current property – they were unsure whether they would have the affordability to purchase it.
The Challenge
We had an initial 15-minute chat with the clients and ascertained that applicant one had a good basic salary and also received a substantial annual bonus each year.
He was unsure whether this could be used, as it was variable, however, having checked, he had a track record of this bonus over the last few years, so we were confident we could use it towards their affordability assessment for the mortgage.
The Solution
After completing a full fact find with the clients and collating paperwork (such as two years’ proof of bonus payments), we approached a lender who could use the bonus in their affordability calculations.
The underwriter was able to understand the bonus income and how this would continue.
They were comfortable that the client’s variable income had not been affected by the pandemic and would stay on track in years to come.
Using Bonuses And Commission For Mortgage Affordability
Fox Davidson is an award-winning team of residential mortgage brokers. To discuss your mortgage funding requirements, please email enquiry@foxdavidson.co.uk or call us on 03300 100313.
Frequently asked questions
What is a high net worth mortgage?
A high net worth (HNW) mortgage is assessed under the FCA’s high net worth rules rather than the standard affordability test. It is available to borrowers with net assets over £3 million or annual net income over £300,000. Lenders read the net assets test literally and include the equity in your main home, and on a joint application only one of you needs to meet it.
How does HNW mortgage assessment differ from a standard mortgage?
HNW assessment is whole-of-wealth based rather than income-multiple based. Lenders consider total assets, liabilities, liquidity, income, and lifestyle costs, then negotiate loan size based on the overall financial picture.
What loan sizes are available with HNW mortgages?
HNW mortgages typically start at £1 million minimum and have no upper cap. Loans of £5 million to £20 million are routine for qualifying clients. Loans above £20 million typically involve syndicated lending or relationship-driven arrangements with private banks.
How long does an HNW mortgage take to complete?
HNW mortgages typically complete in four to ten weeks. Mainstream HNW lenders are at the faster end. Private bank cases involving committee approval, complex structuring, or offshore elements can take eight to twelve weeks.
Further reading: large mortgages, high earner mortgages, investment banker mortgages, complex income mortgages.
All rates and terms are indicative and subject to individual assessment, lender criteria and property valuation. Your home may be repossessed if you do not keep up repayments on a mortgage.
High net worth mortgages under the FCA high net worth definition. Private bank and specialist lender access.