Complex Income Mortgage
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Complex Income Mortgage (Part 1)
What is considered as complex income for mortgage applications in the UK?
It could be all sorts of things. You could be a director of a limited company with a complex salary and dividends, or you might receive bonus income or commission.
I’ve worked with people who sporadically earn big chunks of income throughout the year, but it’s not consistent. A normal mortgage lender doesn’t really know what to do with that.
You might own multiple companies or have multiple jobs and different sources of income. You might earn money from employment plus dividends, shares and investments. All sorts of things can generate income, and many can potentially be considered as complex.
How do lenders assess different complex incomes, and how do they impact the mortgage assessment process?
It depends on the lender and the income. They all look at things in different ways, and some are much more flexible than others.
Most typical high street lenders with the lowest rates won’t usually be the ones to go to in this situation. You need someone to make an informed decision about whether to lend you money or not.
If it’s a large loan of more than £500,000, some lenders will have a particular department that can assess complex cases individually. But most high street lenders aren’t equipped to deal with these cases.
It’s also about how we present it. Depending on what the income is, we will usually aim to present a track history. Generally, we’ll have a conversation with a lender and run the details by them before submitting an application.
What documentation and evidence do I need to provide to prove my complex income?
It depends on what that looks like and how complex it is. If you receive sporadic bonuses, for example, we may need a few years’ records. Perhaps you haven’t had a bonus in the last three months, but there was £10,000 six months ago, and we can show similar amounts over the last few years. Some people do have jobs like that.
Or perhaps you run multiple companies – we just need the paper trail for everything. For any element of income, we need to show where it’s come from and that it’s ongoing.
Lenders won’t use an income you had once but are unlikely to have again. They’re assessing your ability to repay the mortgage over the next 20 or 30 years. It’s not enough to have had a massive bonus last year and nothing since. Your future repayment ability is the key.
What challenges might arise during the mortgage application process when declaring complex income?
Even with the simplest of cases, lenders can often have questions. They might look at a bank statement and want to know more about your spending.
If we then add in a layer of complexity, there may well be additional questions. Remember, the lender doesn’t know you – so it’s our job to put your situation to them in the best possible way.
We try to preempt their questions and get those answered at the point of application. Inevitably, there will be things a lender’s not sure about. The other week, we had a client who had received some money from We Buy Any Car. The lender had questions about it – even though we felt it was fairly obvious where that had come from.
It’s our job to fend those questions off and answer them on your behalf. We do that as much as possible.
How do I improve my chances of getting approved for a mortgage with complex income?
Preparation is key. That means having all the documents and information, and not holding back from your mortgage broker.
Some people think they need to be a bit careful about what they say to us – in fact, it’s the opposite. You need to tell us everything, and we will pass on to the lender what they need to know.
We’ve been doing this a long time – we know what lenders need to know and what’s not relevant. Give us all the facts, and we’ll translate that into the right information for the lender.
As always, make sure your credit score is OK and gather your bank statements – all the normal things.
Are there any mortgage lenders that specialise in offering mortgages to customers or clients with complex income?
Some high street lenders will look at slightly more complex cases, and other, smaller lenders can be better set up to look at things individually. Some lenders will consider everything case by case.
Many big lenders use AI or computer systems to check your payslips against the application form, and then an offer comes out at the other end. Sometimes that can be done in a matter of moments.
With other cases, a person needs to look at it, which can potentially take days or weeks. It completely depends on your situation. There are some types of income that I can take to certain high street lenders.
I had a recent client with five different companies. Whilst it looked complex on the surface, we broke it all down and had all the relevant proofs and documents. In the end, it wasn’t that complicated, and we placed it with a major bank.
How can I calculate my borrowing capacity when I have complex income? Does it differ from regular income?
It depends on how your income is made up. I’ll calculate your borrowing capacity once I know all about your income.
You might not be able to use every source of income, and you might assume you can’t use other types, when in fact you can. Most lenders’ calculators simply ask for your income and whether you’re employed or self-employed. Some might allow for bonuses and overtime, but they aren’t set up for multiple options.
With complex income, you will need a mortgage broker to work out what’s possible. You’re unlikely to find the results online.
What else do we need to know about getting a mortgage with complex income?
We’ve covered the basics. If you’re Mr and Mrs Average, with a simple income, Google or ChatGPT could probably point you in the right direction. But when you add in an element of complexity, AI won’t know that lenders can do certain things, as that won’t necessarily be published.
We talk to lenders all the time. One told us this week that if a client wants to borrow over a certain amount, they can completely ignore their criteria. We just need to discuss it with them – and that’s a massive mainstream lender. Banks wouldn’t publicise that, but they can be flexible depending on the case.
Key Takeaways:
- Complex income in the UK can include diverse sources such as a limited company director’s salary and dividends, sporadic bonuses or commission, income from multiple jobs or companies, and earnings from employment, shares, and investments.
- Most typical high street lenders are not set up to handle complex income, meaning applicants should seek smaller lenders or those with specific departments who can assess cases individually.
- Proving complex income requires providing a complete paper trail for all elements and demonstrating a track history; this may mean needing a few years’ records, as lenders prioritise the applicant’s future repayment ability.
- To improve approval chances, preparation is key, which involves having all documents ready and disclosing all facts and information to your mortgage broker, who will then translate the necessary details to the lender.
- A mortgage broker is essential because they know what is possible and can calculate your borrowing capacity, which is unlikely to be accurately determined using standard online lender calculators.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
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Complex Income Mortgage (Part 2)
We continue the conversation on complex income with Adam Messer. Episode two of two, recorded in May 2026.
I’ve only been trading for one to two years, are there lenders who will consider me?
Absolutely. Two years is the magic number. We can go everywhere if you’ve got two years’ trading history, and if you’ve got one year, there are some lenders we can go to. There’s at least one mainstream lender and some specialists for one year’s trading. The high street comes with better rates, so we’ll use those if we can.
If you’re a self-employed sole trader, your tax year runs from April to April, and you’ll need to have done your second tax return. You might have started up halfway through a year, and in April you’ve done half a year’s trading. Next April, you’ve got a full year.
You’ve technically been running your business for a year and a half, but you’ve got two years’ figures and we can use that. Income will be lower in the first year, obviously, but that’s fine.
Would restructuring my income help with affordability?
Not necessarily – it just depends on what your income is. If you’re self-employed or have a limited company, it’s the history we’re looking at over the last year or two. It doesn’t really matter what you’re doing now, as long as you’re maintaining the same income level.
You could have made £50,000 in the last couple of years, but this year you’ll make £150,000. That doesn’t really matter – it’s the last two years we’re looking at. It’s not based on the prediction for next year.
If you’re paying yourself all salary or all dividends, what you do right now won’t make much difference, because we’re looking at your history.
If you’re employed, and you have the ability to put all your earnings into salary rather than bonus, that’s possibly something to look at – although I can’t think of anyone that would have that level of influence.
On the whole, restructuring in the short term before a mortgage application won’t do much good. It needs to have been done well in advance.
My income is structured for tax efficiency. Will that reduce my borrowing power?
Yes. You can’t have your cake and eat it. You can’t have a low tax bill because of super-efficient accounting practices, and then expect to borrow lots of money.
An exception is where you have a limited company and you may only pay yourself £12,000 to stay below the tax threshold. That’s very tax efficient. If your company makes £100,000, certain lenders will use the profit and not just just your salary. That’s potentially an option.
But you’ve just reduced your income to pay less tax, there’s not much we can do to help.
My income fluctuates year to year. How will that affect how much I can borrow?
People often think that you have to be self-employed to have a complex income, but I’ve helped employed people in certain industries, particularly sales, who have massive bonuses a couple of times a year.
You might earn thousands of pounds as a bonus one month, and not much at all the next month. It helps if you’ve done that for a few years and there’s a track record of earning that money. Often when we look at your last three payslips, as most lenders would, it doesn’t add up to the true amount you earn. We can use P60s to get a track record.
If you’re self-employed and your income has gone up and down, one or two lenders will look at just the latest year. More commonly, though, lenders average your last two years if it’s gone up, or the latest figure if it’s gone down.
If your income has gone from £50,000 to £75,000, we’ll average it. If it’s gone from £75,000 to £50,000, we use £50,000. That’s the industry standard.
Will lenders look closely at my personal spending?
There’s a myth that lenders comb through your bank statements, transaction by transaction and question everything. They really don’t.
We do get bank statements and look for various things. Lenders don’t like to see lots of gambling spending, for example. A few pounds as a one-off won’t get you in any trouble from a lending point of view, but 20 transactions with Skybet or similar might raise some questions.
If you still have money left at the end of the month and you’re not in an overdraft, that’s fine. Once your bills are paid you can spend money on what you like. Be careful that your money is well managed – go steady in the few months before you do a mortgage application, particularly if you like to spend your money on betting.
Other than that, we’re mostly looking at credit commitments like loans, credit cards and leases. No-one is judging whether you shop at Waitrose, or how often you go to McDonald’s or get a takeaway. Lenders generally use the Office of National Statistics for expenditure.
It’s actually rare that lenders ask for bank statements, but if they do, they’re looking for regular payments to the same account every month. That could be a loan we don’t know about and isn’t in your credit report.
It’s all about managing your money. If you’re going over your overdraft limit every month, because you can’t miss that Chinese takeaway or placing some bets, that won’t look good.
If I own properties through a limited company, can that income count?
Yes, on the whole, but not with every lender. We have clients who are property investors and all of their money comes from rent. We get their Buy-to-Let investment mortgages for them, but we also arrange their residential mortgages. I literally did one last week.
We can use that income. It’s not for every lender, but some will accept it, even if it’s not through a limited company. If you’ve got income from land and property you own personally, that can be used as well.
Can investment or Trust income be included?
Yes, it can, but it’s quite rare. I don’t see many cases like that. It can be done, depending on the lender. We’re getting relatively specialist there with Trust income.
We just need to watch that your investment income won’t disappear once you buy a property. If you’re using that money to put down the deposit, it will affect your income from that investment. But most incomes can be used as long as we go to the right lender.
I receive dividend income. Will that be accepted?
Yes, dividend income is accepted by virtually every lender. I can’t think of anywhere that won’t accept dividend income.
You might have your own limited company and you pay yourself in dividends, or you might own shares in a business. You may not work there, but you get paid a dividend each year. Generally, we need two years’ proof of income to take an average.
Can maintenance payments or other secondary income be used?
Absolutely. Maintenance payments will be counted whether they’re coming in or going out. If you pay maintenance that’s counted as one of your outgoings. If you receive maintenance, that can be used as income.
Most lenders use the last three months’ bank statements for maintenance. Some might want it to be court ordered or via the CSA. We just have to go to the right lender, depending on how you’re set up.
Not everyone has a court order or CSA payments. Sometimes it’s a private agreement, and that’s fine as long as we can demonstrate that it’s consistent for the last three months.
All sorts of other incomes can be used, such as foster income, child benefit and universal credit. Most income can be used.
Should I avoid taking dividends or large withdrawals before applying for a mortgage?
No, it’s your money to take whenever you want. Large purchases might be different. If you’re taking money from your business to buy a Porsche or something, it’s probably best to do that after the mortgage application, but there’s no reason not to transfer funds out of your business and into your personal account. It’s your money.
We’ve covered a lot across the two episodes – any final thoughts?
With any complex income, talk to a mortgage broker because this can be a minefield. There are so many lenders and they can all do different things. Knowing where to start is key, so let’s talk it through – always use a mortgage broker.
Key Takeaways:
- Two years’ trading history is the standard for self-employed individuals, but some lenders will consider applicants with only one year.
- Affordability is based on historical income (the last one or two years), not on future predictions, meaning short-term income restructuring right before an application is generally ineffective.
- Structuring income for tax efficiency (resulting in a low tax bill) will typically reduce your overall borrowing power. However, some lenders may use the limited company’s profit rather than just the personal salary/dividends you pay yourself.
- When income fluctuates, lenders commonly average the last two years if the income has gone up, but they will use the latest, lower figure if the income has gone down.
- Lenders check bank statements mainly to look for undisclosed credit commitments, excessive gambling activity, and signs of poor money management, such as regularly going over your overdraft limit.
- For any complex income scenario, it is highly recommended to use a mortgage broker due to the vast differences in lending criteria among various providers
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY-TO-LET MORTGAGES.
For specialist tax advice, please refer to an accountant or tax specialist.
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