Affordability Calculator FAQ’s
Here you will find answers to the most frequently
asked questions relating to our affordability calculator.
If debts are being consolidated, do the existing debts need to
be included as a commitment?
- Yes they do – we work on the assumption that the client has an
established pattern of spending and should future debts return to
these levels we would need to know that the client could meet their
How are BTL properties in the background treated?
- We allow up to 10 BTL in the background. If the
properties are self-financing, i.e. the rental income is equal to
or more than the mortgage payment, then they do not have to be
included in the affordability calculator or the decision in
principle. If there is a shortfall for the property portfolio as a
whole, the difference needs to be added as a commitment.
Details of background BTL’s need to be recorded in the
property portfolio section on the full application.
How is self-employed income treated?
- Clients need to be trading for a minimum of 2 years for the
income to be considered. If the client holds a minimum shareholding
of 25% of a limited company, we will accept salary plus dividends.
If the client is a sole trader we will consider net profits
Are pension deductions taken as a commitment?
- No. We consider this to be an optional payment which clients
can terminate if they wish.
How do we consider income from bonus, commission and
- If bonus, commission or overtime is paid monthly it would need
to appear on the 3 latest months wage slips. An average should be
taken over 3 months and that figure should be annualised. We
will take 50% of this income into consideration. For commission
earnings greater than 50% of the earnings 3 years income figures
will be required. Providing these are level or increasing, an
average over the last 3 years will be taken. If reducing, the case
will not be accepted without a full explanation for the drop and
approval by an underwriter.
Can we use income from a second job?
- We can consider 100% of this income provided it is guaranteed
and the client has held this position for at least 12 months.
If a client pays maintenance do the children also need to be
considered as dependants?
- No. Children do not need to be included as dependants if
maintenance is being paid.
Do child care vouchers need to be included as a
- Child care vouchers should be included in other monthly
commitments. Please note inclusion of this in other monthly
commitments means there is no need to deduct it from the salary
How do you view ex-marital homes for affordability?
- If the property is to be retained and the liability for paying
the mortgage remains, this information needs to be recorded in
other monthly commitments for affordability. Information on this
mortgage should be recorded in the Credit History section of the
decision in principle.
Do we have an income to debt ratio?
- We do not but we will assess overall affordability during the
underwriting process. If there are any concerns please use the
affordability calculator in the first instance to establish our
maximum lending potential.
How do you treat allowances showing on the wage slips?
- Guaranteed allowances can be included in the main income,
examples of this include:
London weightings/large town allowance, car allowances,
permanent shift allowances, Teaching and Responsibility Payments,
NHS banding allowance and Flexi benefits.