The lender said that regarding bonus income, it would use the lower of the bonus received in the latest year or the average of the bonus received in each of the last two years.
For customers who get annual bonuses, the lender will include a bonus from the previous employer received in the previous year when calculating the two-year average.
Halifax said there would be no change to the amount of bonus used within the affordability calculation, which remains at 60% to reflect the variable nature of this income type.
It added that there are no changes for commission income, which must be received from the current employer.
As an example, if a borrower’s latest bonus with their current employer is £50,000 and they also had a previous year’s bonus of £40,000, the lender would key a £45,000 bonus.
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This compares to its previous approach, which would have been £50,000, the current year bonus, divided by two.
Looking at overtime, Halifax said it can now include Waiting List Initiative and Additional Programme Activity as overtime.
The Waiting List Initiative is a centrally funded form of overtime that aims to address the backlog of operations, while Additional Programme Activity is pre-agreed overtime.
Santander adjusts new business and PT rates
Santander will lower its buy-to-let (BTL) remortgage rates and increase lower-LTV fixed rates for selected first-time buyer, homemover, new-build and remortgage products, along with product transfers.
Within its new business range, the lender will be lowering all two- and five-year fixed rates between 60% and 75% loan to value (LTV) by up to 0.15%.
Santander is also increasing selected residential homemover rates, first-time buyer deals, and residential homemover new-build, first-time buyer new-build and residential remortgage products.
All 60-75% LTV two-year fixed residential homemover rates from 60% to 75% LTV will rise by 0.05%, and all five-year fixed rates at 60% LTV will go up by 0.08%.
Santander added that all first-time buyer two-, three- and five-year fixed rates would rise by up to 0.13%, while all two- and five-year fixed rates at 85% LTV will go up by 0.06%.
The firm added that its three-year fixed rate at 95% LTV will increase by 0.09%.
All residential homemover new-build two-year fixed rates from 60% to 75% LTV will increase by up to 0.05% and all five-year fixed rates at 60% LTV will rise by up to 0.08%.
On the first-time buyer new-build side, all two-, three- and five-year fixed rates at 60% LTV will go up by up to 0.13%.
All two- and five-year fixed rates at 85% LTV will rise by up to 0.06% and three-year fixed rates at 95% LTV will rise by up to 0.09%.
Within its residential remortgage range, all two-year fixed rates at 60% LTV will jump by 0.06% and three-year fixed rates with no fee at 75% LTV will go up by 0.01%.
All 60-75% LTV five-year fixed rates will increase by up to 0.1%.
Santander added that it would be withdrawing its BTL remortgage products at 70% LTV, noting that they were “less popular”.
On the product transfer side, all two-year fixed rates at 75% LTV will fall by 0.06%, while its five-year fixed rates between 60% and 75% LTV will decrease by up to 0.1%.
Within its residential range, all 60% and 75% LTV seven-year fixed rates will be increasing by up to 0.06%.
