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Halifax makes changes to income and affordability criteria

  • 07/07/2020
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Halifax makes changes to income and affordability criteria
Halifax Intermediaries has reduced the amount of bonus, overtime and commission income it will use to support mortgage affordability while speeding up its underwriting process for self employed applicants.


From 8 July, the bank will reduce the amount of bonus, commission and overtime income it will use in an affordability assessment from 60 per cent to 30 per cent.

In an email to brokers, it said it had taken the decision because this type of income was likely to be less stable during the Covid-19 pandemic.

The change to the amount of variable income used for affordability will apply only to new cases started on or after 8 July and will not impact any pipeline cases started before this date.

For certain self-employed cases, unless an underwriter review is needed, brokers do not have to supply three months’ bank statements to support the application.

The mortgage application system will tell brokers when the latest three months’ bank statements are required on a particular application.

For pipeline cases that previously showed bank statements were required but no longer require an underwriter review, the bank’s system will be updated to remove the request.

The majority of contractor cases will no longer require review by a Halifax underwriter. Income verification of contractors will be undertaken as part of standard processing.

For contractors providing a copy of the contract as proof of income, a latest bank statement showing the salary credit or latest payslip must be provided.

Halifax said changes were being made to the types of cases requiring review by its underwriters to ensure that only cases where further assessment around the income sustainability was needed were referred for review.


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