Yes, bonus payments can count as income when applying for a mortgage in the UK. However, how they are considered can vary between lenders. Here are the key points to understand:

Factors Lenders Consider:

1. Consistency and Regularity:
   • Lenders typically prefer bonus payments that are consistent and regular. If you have a history of receiving bonuses over several years, lenders are more likely to consider them as part of your income.
   • Sporadic or one-off bonuses might not be given as much weight or may be excluded entirely.
2. Percentage Consideration:
   • Some lenders might only consider a percentage of your bonus income. For example, they might count 50% or 60% of your bonus towards your total income for affordability calculations.
   • This percentage can vary significantly between different lenders.
3. Documentation:
   • You will need to provide evidence of your bonus payments, usually through payslips and bank statements.
   • Some lenders might require proof of your bonus history for the past 1-3 years to verify its consistency and amount.
4. Employer Verification:
   • Lenders might contact your employer to verify the likelihood of future bonuses. They may ask for a letter confirming the expected bonus or a statement of past bonuses.

Mortgage Types and Bonus Income:

• Residential Mortgages: Lenders are generally more cautious with bonus income when it comes to residential mortgages. They may be more conservative in how much of your bonus they consider.
• Buy-to-Let Mortgages: Lenders might be slightly more flexible with bonus income for buy-to-let mortgages, given the investment nature of these loans.

Practical Steps:

1. Gather Documentation: Collect your payslips, bank statements, and any letters from your employer that detail your bonus payments over the last few years.
2. Consult with Mortgage Advisors: It can be beneficial to speak with a mortgage advisor who can help identify lenders that are more likely to consider your bonus income favorably.
3. Lender Research: Different lenders have different policies, so research or consult your advisor to find the best fit for your financial situation.

Summary:

Bonus payments can count as income for mortgage applications in the UK, but their consideration depends on factors like consistency, documentation, and the lender’s policies. To maximize the likelihood of your bonus income being considered, ensure you have comprehensive documentation and consider working with a mortgage advisor.