Under the changes, which are available to the whole of market, 100 per cent of shift allowance, overtime, bonus and commission will be accepted as income, in a bid to bring mortgage criteria into line with people’s real incomes, the lender said.
Where applicants meet the usual employment criteria – a fixed term contract for a minimum of 12 months, for example – some benefits will also be considered when assessing affordability.
These include Child Tax Credit and Working Tax Credit (or the Universal Credit equivalent). If applicants have children under 13, 100 per cent of Child Benefit will be counted as income.
TML said it hoped the changes would bring more flexibility to the mortgage market, in an era when the nature of customers’ work and income is changing.
The Mortgage Lender deputy chief executive Peter Beaumont said: “In a competitive market it’s imperative we’re providing our distribution partners with real life lending options that meet the needs of their customers and offer borrowing at competitive prices.
“The changes to residential affordability reflect the reality of the complicated circumstances borrowers are presenting when they apply for a mortgage while ensuring lending decisions remain prudent and affordable.”