Affordability Calculator

For Interest Only Loans please input the term as 25 years, for all other repayment types enter the term required.

You must use the calculator on every case before submitting a DIP. If you experience any difficulties, please contact your IRM or call the Broker Help Line on 0345 600 1469*.

An assessment of income and expenditure is the underwriting measure used in establishing the maximum that can be borrowed. We have a short Decision In Principle (DIP) form to determine the amount your clients may borrow. The form will be used in conjunction with a full credit reference search to further enhance the decision.

The initial underwrite of the mortgage application will be carried out using the Affordability Calculator.

For any incomes listed where 50% is used, input the full amount under non-guaranteed other and the calculator will automatically take off 50%.

The calculator will automatically apply deductions to gross income based on tax bonds and National Insurance to calculate the net income

Please check that the mortgage application fits within the Society's LTV ratios.

Income

Income that can be used within the calculator is listed below:

Employed

Income Type Amount accepted
Basic Salary 100%
Guaranteed Overtime 100%
Bonus Guaranteed 100%
Bonus Non-Guaranteed 50%
Commission 50%
Maintenance Received 100%
Rental Income 0%
Investments Income 0%
Pension Income 100% if received
Non-Guaranteed overtime/ Second job 50%
Benefits^ 100%

Notes

Fixed Term Contract Workers:

  • Contracts must be for at least 6 months
  • Must be a UK resident or have indefinite leave to remain in the UK
  • Funds must be used for applicant's main residence.

Zero Hour Contracts:

  • 100% Income used
  • Income verified off 2 years P60s and 3 months payslips.

Sole Trader

If net profit has increased over the past two years, then use an average of the last 2 years net profit. If net profit over the past 2 years has decreased, then use the latest year.

Income Type Amount accepted
Net Profit 100%
Maintenance Received 100%
Rental Income 0%
Investment Income 0%
Pension Income 100%
Non-Guaranteed overtime/ Second job 50%
Benefits^ 100%

Limited Company

If dividends/renumerations have increased over the past two years, then use an average of the last 2 years dividends/ renumerations. If dividends/ renumerations over the past two years have decreased then use the latest year. If dividends exceed net profit please refer to your relationship manager or support on 0345 601 6683.

Income Type Amount accepted
Directors Renumeration 100%
Dividends 100%
Maintenance Received 100%
Rental Income 0%
Investment Income 0%
Pension Income 100%
Non-Guaranteed overtime/ Second job 50%
Benefits^ 100%

Limited Liability Partnership

If the applicant's share of total net profit has increased over the past two years use an average of the share of net profit. If the applicant's share of net profit over the past two years has decreased, then use latest year.

Income Type Amount accepted
Share of Net Profit 100%
Maintenance Received 100%
Rental Income 0%
Investment Income 0%
Pension Income 100%
Non-Guaranteed overtime/ Second job 50%
Benefits^ 100%

Independent Contractor

Average of contracted work over the past 2 years or the average of employed and contracted work for the last 2 years. (Employed and contracted work must be in the same line of work.)

(For usable income please see Sole Trader or Limited Company)

Income Type Amount accepted
Maintenance Received 100%
Rental Income 0%
Investment Income 0%
Pension Income 100%
Non-Guaranteed overtime/ Second job 50%
Benefits^ 100%

Note: Income from UK Land and Property including rental income is unacceptable

^See A-Z Lending Criteria Guide for list of acceptable benefits.

Outgoings

All personal expenditure, including all loans and credit cards shown within the credit search, must be deducted as outgoings.

For a Decision in Principle we must have authority to carry out a credit search and the income and expenditure needs to be clearly completed in order to establish the true free net disposable income.

With regard to credit cards, where balances are to remain after completion, the balance x 3% maintenance payment will be shown as an outgoing.

The form must be fully completed and the declaration ticked.

Responsible Lending and affordability

  • All applications are subject to affordability checks.
  • Key considerations will be the applicant's overall conduct of their bank account and credit reference checks. If these do not demonstrate that the mortgage is affordable, even if the Affordability Calculator suggests we might consider the loan, the application may be declined.
  • Any figures used in applications must be validated by supporting documentation.