Direct answer: separate basic salary, guaranteed and discretionary bonus, commission, allowances, deferred cash, share awards and other benefits. Record the currency, payment frequency, contractual basis, history, vesting or payment conditions, amount actually received and expected continuity for each component. Lenders may use different percentages—or none—before applying foreign-currency treatment and affordability.
Why the Headline Remuneration Package Can Overstate Mortgage Income
An employer may describe total compensation using base salary, target bonus, commission opportunity, allowances, restricted stock units and long-term incentives. Those figures do not all represent cash that is guaranteed, currently vested or likely to continue throughout the mortgage term.
FCA responsible-lending rules require lenders to evidence each income element used and to consider income types, acceptable proportions and variation over time. Published lender criteria show materially different approaches to bonus, commission, shares and foreign-currency income.
Which elements have actually been paid in cash, which are contractually guaranteed, and which remain conditional, deferred or exposed to market value?
Separate Every Component Before Applying a Sterling Value
| Component | Information to establish | Potential lender treatment |
|---|---|---|
| Basic salary | Contract, currency, frequency, start date and permanence. | Often the core income, subject to accepted currency and evidence. |
| Cash bonus | Guaranteed or discretionary, payment history and current employer. | A percentage, average, lower recent figure or zero if not yet paid. |
| Commission | Frequency, target, actual receipts, seasonality and sustainability. | Average evidenced receipts, commonly subject to a lender limit. |
| Allowances | Purpose, contractual status, expiry and payslip presentation. | Full, partial or excluded depending on type and permanence. |
| Shares or RSUs | Grant, vesting, restrictions, sale, cash receipt and recurrence. | Unvested awards may be excluded; lender policies differ after vesting. |
| Deferred compensation | Payment date, conditions, forfeiture and currency. | May be excluded until paid or supported by an acceptable history. |
Cash Paid, Shares Vested and Awards Granted Are Different Facts
A grant statement can show an award with a substantial notional value, but the client may not own unrestricted shares or have received cash. Vesting can depend on time, employment, performance or corporate events, and the eventual value can change.
Published lender positions illustrate the difference. HSBC’s high-value service currently states that restricted stock units and deferred bonuses are not income it can consider. Halifax criteria state that an annual bonus paid partly or wholly as shares is only acceptable where there is evidence the shares were immediately cashed in. These examples do not create a market-wide rule; they show why the exact award lifecycle matters.
Record the equity-award sequence
- date and terms of the original grant;
- vesting schedule and conditions;
- number or value actually vested;
- sale date and proceeds received;
- tax or withholding deductions;
- currency and destination account;
- history of comparable awards; and
- whether future awards are contractual or discretionary.
Variable-Income and Currency Reductions Can Both Apply
Overseas variable remuneration can pass through two distinct filters. First, the lender decides how much of the bonus, commission or allowance is sustainable. Second, it converts the accepted foreign-currency amount using its own method and may apply a further reduction for exchange-rate risk.
For example, published Halifax criteria state that selected non-sterling basic salary, bonus, overtime and commission can be accepted, with a stated currency reduction. Its treatment of bonus differs from its treatment of other non-sterling income. Other lenders use different methods or do not accept foreign-currency income for particular transactions.
The correct order is therefore to classify the income, establish the acceptable historical amount and then apply the selected lender’s currency treatment—not to convert the employer’s maximum package into sterling first.
History and Evidence Should Match the Payment Frequency
Monthly commission, quarterly incentives and annual bonuses produce different evidence patterns. Published lender criteria commonly require consecutive payslips or multiple annual payment records and can treat missing periods as zero. A bonus from a previous employer may be treated differently from one paid by the current employer.
The evidence may include the employment contract, payslips, remuneration statements, bank credits, award letters, vesting records, sale confirmations and tax documentation. Amounts should reconcile in the original currency before conversion.
A target, forecast or employer estimate should be labelled as such. It should not be presented as income already received.
A single annual payment can require a multi-year history, while monthly commission may be averaged from consecutive payslips.
Illustrative Scenario: Base Salary, Annual Bonus and RSUs
Example only: a British technology executive in California wants to buy a £2 million London home.
The client receives a USD basic salary, a target cash bonus of 40% and annual RSU grants. Their wealth report values the latest unvested award and adds target bonus to base salary, producing a total compensation figure far above cash received in the last year.
The mortgage assessment should identify cash bonus actually paid, its history and employer continuity; separate vested and sold shares from unvested grants; establish the lender’s USD and foreign-currency treatment; and assess the purchase, residence, deposit and wider liabilities. A specialist or private-bank route may consider the wider position differently, but that still requires evidence and a defined repayment basis.
The adviser insight: an impressive compensation package can support a strong application, but only after conditional awards and cash income have been separated.
Expected Relocation or Job Change Must Be Reflected
An overseas package may include housing, schooling, hardship or relocation allowances that end when the client returns to the UK. Bonus participation or equity vesting may also change on transfer, resignation or a move between group companies.
The application should state known future changes and provide the new remuneration terms where available. Historic income that will end should not be presented as continuing simply because it appears on recent payslips.
When Complex Remuneration Should Trigger a Referral
Involve Willow when:
- variable pay is material to the required mortgage amount;
- target compensation is being used instead of actual receipts;
- bonus or commission is paid in a foreign currency;
- the client has changed employer or role recently;
- annual pay has been received for fewer than two cycles;
- shares, RSUs or deferred compensation form part of the package;
- the client receives temporary overseas allowances;
- award documents and payslips use different figures;
- vesting or payment depends on continued employment;
- the client will relocate or transfer before completion;
- a previous lender excluded the variable income; or
- the property budget relies on the full headline compensation package.
Keep the Professional Responsibilities Clear
Willow can assess how mortgage lenders may treat remuneration components, compare likely lender appetite and explain the evidence required. Willow does not provide tax, legal, employment, investment, securities, immigration or foreign-exchange advice.
The international adviser, tax adviser, lawyer and investment professional retain responsibility for advice within their own permissions and jurisdictions. Willow does not value unvested awards or predict future share prices, bonus outcomes or exchange rates.
Lending remains subject to status, valuation, lender criteria and full underwriting.
A Useful First Outline
An anonymous first discussion can include residence, employer, role and contract, basic salary, bonus, commission, allowances and equity awards separately, currencies, payment history, vesting and cash receipts, expected changes, property objective, deposit, liabilities and timing.
The purpose is to establish a defensible mortgage-income figure before the client commits to a purchase based on total compensation.
Explore More Guidance for International Advisers
Visit the International Adviser Hub for further guidance on expatriates, overseas buyers, foreign-currency income, ownership, private wealth and UK property finance.
Explore the International Adviser HubFrequently Asked Questions
These answers describe general approaches. Current lender criteria and the outcome of a full assessment remain case-specific.
Can an overseas bonus support a UK mortgage?
Potentially. The lender may require a payment history, evidence that it has actually been received, current-employer continuity and an accepted currency before using a proportion of it.
Will a lender use the client’s target bonus?
Not automatically. A target or maximum award is different from income actually paid. Lenders commonly base variable-income treatment on evidenced receipts and sustainability.
Can commission be treated like basic salary?
Usually it is assessed separately as variable income unless the lender’s criteria support another treatment. Frequency, history, employer and evidence affect the usable amount.
Are restricted stock units accepted as mortgage income?
Treatment varies and some published lender criteria expressly exclude RSUs or deferred bonuses. Vested, sold and cash-received awards may be treated differently from unvested awards.
Do contractual allowances count?
Possibly. The allowance type, contractual status, expiry conditions, currency and payslip treatment all matter. A temporary relocation allowance should not be presented as permanent income.
What happens when variable pay is in another currency?
The lender can apply both its variable-income method and its foreign-currency conversion or reduction. These are separate stages of the assessment.
When should Willow be involved?
Before a property budget depends on target compensation, unvested shares, a one-off award or a foreign-currency variable-income figure that has not been tested.