Income criteria

Acceptable income and proofs required

Please see the below tables for the type of income and proofs we accept.

We'll seek to validate your client's income using credit bureau information. If we can do this successfully, we won't request to see any proofs.

For interest only, the minimum income criteria is £75,000 for sole applicants or £100,000 for joint applicants (based on basic income only). The minimum income criteria will determine if your clients are eligible for our interest only product and the assessment is made using their primary basic source of income. You can't use Secondary income, bonus, overtime or commission. 

Download our packaging support guide for top tips when submitting proofs.

Please don't attach proofs to an application if they aren't requested. This may delay the progress of your case.


Income from employment (including second jobs*)

Download our guide to payslip requirements


Acceptable income and proofs required table for income from employment
Acceptable income Proofs required
Basic pay Latest payslip**
Car Allowance, Location Allowance, Mortgage Subsidies, Shift Allowance, Teaching & Responsibility Payment (TLR) 1 & 2, Value account, Pension Benefit Fund and Housing Allowance for Police Latest payslip**

Housing Allowance (Non Police) - subject to an employment contract/letter confirming the payment is contractual, guaranteed and will not cease (e.g. in the event the applicant takes on a mortgage).

If the payment varies, the average will be taken. 

Latest 3 months payslips or
relevant weekly /fortnightly /4 week equivalent

*Second job income can only be used where the applicant has been in the job for at least 6 months.

**For National Rail and supermarket workers, we will require the last 3 months payslips. Contact us for more information. If a payslip isn't available or your client has a new job, please read our employment criteria

Recruit and Retain (RRP)

Armed Forces

This must be shown on all payslips in the last 3 months.

If the header includes the words Reserve/Reserve Band/Reserve Banding, it can’t be used.

If the daily rate* is the same across all 3 months it can be used as basic pay (average of the last 3 payslip amounts). If the daily rate is not the same it can only be used as overtime.

*The daily rate is the payslip amount divided by the number of days in the payslip month.

Non-Armed Forces

This must be shown on all payslips in the last 3 months / 8 weeks AND supporting evidence (employer letter/contract) is needed confirming the payment is ongoing and is permanent/guaranteed.

If the amount paid across all payslips is the same it can be used as basic pay. If the payment varies it can only be used as overtime.


Income from bonus, overtime and commission (BOC)

  • For all applications where we require BOC, we'll apply the average amount of any frequency.
  • For any BOC to be acceptable it must be present on the latest payslip.
  • BOC is acceptable for Fixed Term Contractors.
  • Tronc is a common term for tips and service charge payments in restaurants and hotels - we treat this as Overtime.
  • Provided the latest payslip shows BOC, we will treat any remaining payslips not showing BOC as £0 in the averaging. We can't use the latest payslip if it doesn't show a payment. Please note:
    • For annual bonus and commission, both proofs must show a payment.
    • For half yearly bonus and commission, at least 2 of the 4 proofs (including the most recent one) must show a payment. 
  • If BOC is not present on the latest payslip, then you must provide a subsequent payslip that shows BOC once available. We'll then calculate BOC using the most recent payslip.
    • For Weekly/Fortnightly paid applicants only – where no BOC is on the latest payslip, but the payslip shows holiday/sick pay, you don't need to obtain a subsequent payslip.
  • If you're using a combination of BOC (e.g. bonus and overtime), each type of BOC must be on the provided proofs.
    • It's important to ensure you enter the income into the correct income type and with the correct frequency. For income not labelled bonus, overtime and commission see here.

Below you'll find what to use when keying your application within NFI Online. The proofs to evidence this are:

Income Type
Frequency
Amount you need to key
Proof required
Bonus / Overtime / Commission (BOC) Monthly / 4 weekly The average amount from the latest 3 payslips  Latest 3 consecutive payslips from the same employer

The most recent payslip can't be £0.



Fortnightly

The average amount from the latest 6 payslips divided by 12. Then keyed as weekly.

Please note: Where no BOC is present on the latest payslip, but the payslip shows holiday/sick pay, you do not need to obtain a subsequent payslip.

Latest 6 consecutive payslips from the same employer

The most recent payslip can't be £0 unless it shows holiday/sick pay.


Weekly

The average amount from the latest 8 payslips

Please note: Where no BOC is present on the latest payslips, but the payslip shows holiday/sick pay, you don't need to obtain a subsequent payslip.

Latest 8 consecutive payslips from the same employer

The most recent payslip must not be £0 unless it shows holiday/sick pay.
Bonus / Commission Quarterly The average amount from the latest 3 payslips or statements Latest 3 consecutive quarterly payslips or statements from the same employer. The date on the oldest payslip must not be more than 12 months before the original DIP date.

The most recent payslip can't be £0
Half yearly The average amount from the latest 4 payslips or statements Latest 4 consecutive half yearly payslips or statements from the same employer. The date on the oldest payslip must not be more than 25 months before the original DIP date.

At least 2 of the 4 proofs must show bonus/commission (1 of which must be the most recent).
Annual The average amount from the latest 2 payslips or statements Latest 2 consecutive annual payslips or statements from the same employer. The date on the oldest payslip must not be more than 25 months before the original DIP date.

Both proofs must show a bonus/commission payment. 

Additional income - not labelled bonus, overtime and commission

Acceptable income and proofs required table for additional income
Acceptable income and proofs required table for additional income
Acceptable income Proofs required
Check the unacceptable income list to see if the income can be used. If it can be used, please ensure it is keyed correctly.
Weekly / Fortnightly / Monthly / Four Weekly Quarterly / Half Yearly / Annually
Additional income is same amount across all payslips* Treat as basic              Treat as overtime             
Additional income is variable across all payslips* Treat as overtime             
Additional income is the same or variable but not on all payslips* This income can't be used as it does not appear on all payslips.           

*To calculate any basic, bonus, overtime, commission or additional income we must be in receipt of the correct number of payslips as per the income from employment table above.


Temporary Workers and Zero Hours Contractors

We treat Temporary Workers and Zero Hours Contractors (ZHC) the same, so you should key both as ‘Employed Temporary’.

A ZHC contract is where an employer and employee have entered into an open ended contract with no guaranteed minimum working hours.

Example of roles where ZHC contracts may apply, but aren't limited to, include:

  • Bank Nurses (NHS & Non-NHS), Supply Teachers and Locums etc
  • Piecework or Pricework are types of employment in which the employee is paid at a fixed rate per unit produced or action performed.
  • Income from Retained/on-call Firefighters and Armed Forces Reservists.

Temporary employees have contracts which are limited to a certain period of time. The arrangement may be via an Agency or directly through an employer. We draw no distinction between temporary Agency workers or those employed directly.

Applicants who are Temporary Workers or ZHC must have been employed on this basis for at least 12 months with the same employer. The only exception being the following:

  • NHS bank nurses
  • NHS Locums
  • Supply Teachers
    • We still require a 12 month history. This doesn't have to be with the same NHS trust/the same school provided they worked a complete year within the same occupation.

The following continues to apply:

  1. Income from the above is only acceptable where it's not the primary income i.e. there must be another employed/self-employed/pension income, which is higher, it doesn’t have to be a second job.
  2. The applicant must have been employed on this basis within the same industry for at least 12 months.
  3. The latest P60 and most recent payslip are required to calculate the income.
  4. The income should be the lower of the latest P60 total or the most recent payslip year to date annualised.

Piecework/Pricework

Where the employee receives pay at a fixed rate per unit produced or action performed. We'll assess this using the Temporary worker/ZHC income criteria above.

If your client's employment contract is subject to a minimum number of guaranteed hours or the contract confirms their income won't fall below the National Minimum Wage, they can use one of the below approaches:

  • The Temporary worker/ZHC approach
  • Treating the guaranteed element as basic income
  • Treating as overtime anything over and above the guaranteed element.

If you're using basic income with overtime, we'll waive the 12-month minimum time with employer requirement. For this you must submit:

  • A copy of the applicant’s employment contract. AND
  • The latest 3 month payslips to verify the overtime element.

Income from self-employment

Acceptable income and proofs required table for income from self-employment
Acceptable income Proofs required
Income figures are required for the last two years.
  • Sole trader/partnerships - Applicant's share of net profit
  • Director's salary
  • Director's dividends
  • The latest 2 years HMRC Tax Calculation (SA302) forms and Tax Year Overviews OR
  • An accountant's certificate covering at least the last two years

      View our employment criteria for more information.

Fixed Term Contract
  • The latest 2 years HMRC Tax Assessment forms OR
  • An accountant's certificate covering at least the last two years OR
  • The latest employment contract if income is being assessed as employed).

      View our employment criteria for more information.

We reserve the right to request additional information such as Company Accounts. Accounts must be Final Accounts (drafts and projections are not acceptable) and the end of the latest financial period must not be more than 18 months ago. If the last accounting period is greater than 12 months, the income figures will be annualised. Where the latest two years HMRC Tax Calculations are supplied, the corresponding two years HMRC Tax Year Overviews are also required.

We're aware that there is currently a delay in obtaining Tax Year Overviews from HMRC. Please only submit SA302 where the Tax Year Overview has already been obtained. 

Download our guide to HMRC tax calculation and tax year overview requirements.


Retirement income

Acceptable income and proofs required table for income from other sources
Acceptable income Proofs required Key as
State Pension Latest annual statement of pension Pension income (if the proof shows State Pension is awarded jointly, please key 50% against each applicant)

Private/Company/Occupational Pension

 

 

 

 

  • Latest annual statement of pension, or
  • Latest payslip from the pension provider, or
  • Latest letter from pension provider, or
  • Latest P60 from the pension provider

Lending into retirement

The latest annual statement of pension due on retirement or the latest letter from the pension provider confirming pension due on retirement.

  • If the anticipated income into retirement includes a personal private pension scheme then the income used is based on the Medium Growth, 25% pension commencement lump sum (PCLS) figure.
  • If the anticipated income into retirement includes a salary-linked pension scheme, then the income used is based on 25% PCLS.
Pension income

War Disablement pension

War Widow(er)s pension

War Disablement/War Widow(er)s Pension Notice Pension income
Income from a company the applicant owns that will continue to provide an income into retirement Accountant's certificate Investment income

See Lending into Retirement for more information.


Income from other sources

Acceptable income Proofs required Key as
Investment income Documentary evidence of value and nature of investment income i.e. Solicitor/Accountant/Trust Administrator letters. Only income of a guaranteed amount, which will continue for the foreseeable future is acceptable. Investment income
Dividend income from a portfolio of shares Accountant's certificate Investment income
Dividend income from an applicant that owns a share in a business Accountant's certificate Investment income
Rental income from a mortgage free property

Applicant’s latest 3 months' bank statements^, evidencing the latest three months’ net rental payments. Rental income must be paid by Direct Debit/Standing Order.

We also accept a mix of bank and Association of Residential Lettings Agents (ARLA) statements evidencing the latest three months’ rental payments where this is needed to support evidence of reduced or £0 payments due to repairs/maintenance fees. Or where the latest rental payment is higher due to a rent increase for a new or existing tenant.

Rental income from short term or holiday lets, "rent a room" lodgers or foreign property will not be accepted.

Rental income from an unencumbered property
Rental income from a letting business with a mortgage The last 2 years' income figures via an accountant's certificate covering the applicant's share of net profit, or HMRC tax assessments are required. Treat as self-employed income
Maintenance
  • Three months' bank statements^ as evidence of payment.

We'll only accept payments that have been received for at least three months. Where there is a difference in the amounts received, the lowest figure received in the last three months will be used for affordability.

Where the payments have previously been received into a joint account with the person paying maintenance, we'll require the latest full month's worth of maintenance payments to be made into a sole account, with no ongoing joint association to the maintenance payer.

Maintenance income
Parental leave

For applicants who are on or due to go on parental leave, the existing and future child care costs should be included as an outgoing, and the future number of dependents declared.

Employed applicants

If your client’s due to go on, or is already on parental leave, they must provide either:

  • the latest payslip which shows the client is on parental leave, e.g. Statutory Maternity Pay information and the payslip prior to going on parental leave or
  • a copy of the letter received from their employer confirming the terms of their parental leave or
  • a copy of their return to work letter.

The letter from the employer must be addressed to your client (not to Nationwide or to whom it may concern) and should state the return to work income. Where the letter does not confirm the return to work income, the payslip issued before parental leave started will also be required.

Self-employed applicants

Refer to self-employed income

Bonus, overtime or commission

Bonus, overtime or commission can only be accepted when an applicant has been on parental leave for less than 3 months or where the parental leave period taken was less than 3 months. If your client has returned to work, the bonus, overtime or commission received during the parental leave period can still be used.

Depending on the employment type, treat as employed income or self-employed income
Foster Income
  • A letter from the Foster Agency confirming the total income paid for each of the last 2 years and that the most recent year's figure is likely to continue at the same level for the foreseeable future.
  • The children in foster care of the applicants must be keyed as dependents
Treat as self-employed income
Income Protection Insurance (IPI)
  • A copy of the applicants IPI policy schedule and confirmation that the payment is being made, e.g. latest payslip or a letter from the insurer.
Treat as employed income

^Please note, for all applications where bank statements are held in joint names with an unknown third party, we will require further proof of eligibility.


Background properties

Below you will find our policy for verifying rental income on properties owned as a personal Buy to Let, a Limited Company or Limited Liability Partnership.


Mortgaged Unencumbered
Personal Buy to Let

You can either:

  • key the mortgage as an outgoing and key the rental income, so it’s self-financing.
  • or key the income from SA302 as self employed.

You can either:

  • key as Mortgage free*
  • or choose not to key
Limited Company/ Limited Liability Partnership
  • There is no need to key the property or rent.
  • If the income is showing on the SA302s, you can declare this as self-employed income.
  • If the income is showing on the SA302s, you can declare this as self-employed income.

*We won’t accept this income if the rental income is paid into a Limited Company or Limited Liability Partnership Bank account


Benefit income

You must key the Benefit income in the correct fields under 'Other Income'. You can't use benefits as income if the client, or proofs provided, indicates that the payment is going to stop. Payment must be expected to continue at least in part for the foreseeable future.

Acceptable income Proofs required Key as
Child benefit
  • Accepted if neither applicant's total income is more than £50,000
  • No proofs are required
Child benefit
Credits and benefits, including: 
  • Working Tax Credit
  • Child Tax Credit
  • Universal Credit*
  • Employment & Support Allowance*
  • Adoption Allowance**
  • Widowed parents allowance**
 
  • Latest 3 months bank statements
  • We'll use an average of the last 3 months benefit payments. If the latest bank statement doesn’t show the payment, we can’t accept that income.^
Universal Credit*/Tax Credits
Special Guardianship Allowance (SAG)**
  • Latest 3 months bank statements
  • The latest SAG award letter
  • We'll use an average of the last 3 months benefit payments. If the latest bank statement doesn’t show the payment, we can’t accept that income.^

Disabled benefits, including:

  • Child Disability Payment/Disability living allowance (DLA)* - DLA paid to an applicant for a child under 16 is also acceptable
  • Personal Independence Payment (PIP)/Adult Disability Payment
  • Latest award notice (Pages 1 and 2 only)
State Disability Benefit
  • Carers Allowance (CA)*
  • Attendance Allowance (AA)
  • Latest award notice (Page 1 only)
  • Incapacity benefit
  • Industrial Injuries Disablement Benefit
  • Disablement living allowance on behalf of a child under 16
  • Armed Forces Compensation Scheme
  • Armed Forces Independence Payment (Applicants who receive an Armed Forces Independence Payment will not be eligible for PIP, DLA or Attendance Allowance)
  • Latest award notice
  • When attaching the Latest Award Notice, this must not include any of the applicant’s health or medical information. This ensures the document is in line with all GDPR requirements

  • Reduced Earning Allowance (REA)
  • Reduced Earnings Allowance Letter
  • When attaching the Latest Award Notice, this must not include any of the applicant’s health or medical information. This ensures the document is in line with all GDPR requirements
  • Infected Blood Support Scheme (IBSS) – Includes schemes in England (EIBSS), Scotland (SIBSS), Wales (WIBSS) and Northern Ireland (NIIBSS)
  • Latest Award Notice

State Disability Benefit

(Only provide the pages that evidence the benefit is paid to our applicant and confirms the income position. Don't include pages relating to health/medical information)

* Please speak to your BDM and provide them with your clients (m) reference number, if you receive any of the following as part of Universal Credit:

  • Employment & Support Allowance (ESA)
  • Carers Allowance
  • Child Disability payments
  • You receive ESA as a standalone benefit and a case has failed on affordability. 

** We can only take this if the application has a dependent who is 11 years old or younger.

^ We'll require further proof of eligibility for all applications where bank statements are held in joint names with an unknown third party.


Unacceptable income

List of unacceptable income
Pension Credit Cryptocurrency* Expenses
Apprenticeship Income** Temporary allowances*** Restricted Stock Units (RSU) or Stock Options****
Mileage allowance Fuel allowance Foreign Currency
Flexible pension income Housing Benefit Shadow Pay
Income drawdown  First Aid  Subsistence payments
Jobseeker's Allowance Income Support Income from lodgers
Scottish Child Payments Third jobs Bereavement Allowance
Fixed Term Annuities Income from casual (ad hoc) employment Seasonal employment
Guardians Allowance Kinship Allowance Broadband and phone allowance
Income from short term or holiday lets Educational or Access to Work Grants/ Bursaries Teaching and Learning Responsibility 3 (TLR) payments

* This includes income obtained from Cryptocurrency companies.

** Only acceptable if it meets our 'Fixed Term Contract Income' criteria.

*** For example acting up allowance or any allowance which is of a temporary nature. This includes Mark Time, Honoraria, cost of living payments or an Inflation Bonus.

**** Employer bonuses or incentives paid in the form of RSU’s or Stock Options. They'll receive these benefits in the form of a promise of shares in the company’s stock at a future date.


Affordability

Maximum borrowing is based on individual affordability. The actual income multiple will vary depending on the application. We take a range of factors into account to determine how much can be borrowed and the minimum affordable term. Our calculation aims to ensure individuals have a sufficient proportion of their income remaining. This is after their mortgage repayments to cover their outgoings.

Top tips on affordability

  • Ask your client to provide their income proofs up front. Before you submit their application, ensure they match the income they've declared.
  • Check for any further expenditure or outgoings. For example payslips; bank statements; credit reports (if available from your client).
  • Check if your client has any unsecured debt, which has more than six months to run. This could impact their application.
  • Once you have the full picture on your client's outgoings, make sure they're entered accurately and in full in the appropriate field. This applies when keying their affordability/DIP/application.

Affordability calculator

Our affordability calculator will allow you to check how much we might lend your client. This is without having to undertake a full Decision in Principle which will involve credit scoring your client.

Saving your affordability calculator results

To save your clients results, follow the steps below:

1. Fill in the calculator as normal.

2. On the results page press ‘Print’.

3. You should then see a Print Options screen that asks you to ‘select printer’. Scroll until you find any of the following options:

  • Adobe PDF
  • Microsoft XPS Document Writer
  • PDF Creator (you can download a free version of PDF Creator here).

4. Select one of the options above, then press ‘print’.

5. After a few moments, a window should pop up asking you to ‘Save File As’. Choose your destination folder as normal and press ‘save’. You have now saved your client’s results.


Stress testing

As part of the Decision in Principle we'll conduct a stress test on all applications. This is part of our affordability assessment.

We may be required to do a stress test at a higher rate when your client is porting an old product to their new property. This is due the interest rate of your client's existing product.

Once you've decided that you want to port the relevant account, we'll do this extra stress test (where necessary) within NFI Online.

It may be possible for our affordability decision to change between DIP and Reserve Product if your client does not meet our affordability criteria after the additional stress testing has been applied.


Like for like

If your client(s) is an existing Nationwide mortgage customer moving home, we'll consider their application on a ‘Like for Like’ basis where:

  • The total amount of the borrowing (excluding product fees if added), is no more than the existing borrowing
  • There is no change of applicant(s) (i.e. not adding, removing or replacing an applicant)
  • The borrower is not changing their current repayment method
  • The term of the new mortgage is not shorter than the current term.
  • We'll allow term extensions unless the borrower(s) is
    • already retired  OR
    • the term extension takes the borrower(s) into retirement OR
    • further into retirement.

On Like for Like applications we'll require you to provide all generated proofs. This includes Proof of Income.

If your client(s) mortgage is on Interest only and meets the above criteria (but fails affordability assessment), you must manually appeal these cases. You can do this through your BDM. They will then send your appeal to our underwriting team to review.

We'll require 3 months bank statements. This is in addition to the documents automatically requested when you submit an application.


Lending into retirement

The maximum retirement age is 70. The mortgage term must not extend beyond the 75th birthday of the eldest applicant.

Where the mortgage term extends into retirement, the following criteria apply.

Retirement is less than 10 years away

  • Provide details of both current income and expected retirement income.
  • For affordability purposes, use the lower of the current income or expected retirement income.

Retirement is 10 years or more away

  • Current income used for affordability purposes
  • Evidence of the existence of a current and/or past pension (other than State Pension). For example a payslip showing a pension deduction, pension statement or pension payment on a bank statement.

Clients with additional properties

Where your client has, or will have on completion, only one mortgaged property, standard LTV limits will apply. Maximum 85% LTV will continue to apply if the client will own two or more mortgaged properties on completion. We'll treat this as a Second Property application. This applies even if you are purchasing or remortgaging the property to be your client’s main residence. For this purpose, we don't count background properties owned in an applicants Limited Company or Limited Liability Partnership.

If your client owns more than one property, we require all addresses and mortgage details. Please see our products, loan size and maximum LTV criteria

We'll consider the outstanding balance of any mortgages that are continuing. Unless there is a simultaneous TMW Let to Buy application submitted for the existing residential. Or they are let and satisfy the following:

  • The rent received is less than 165% of the current mortgage payment. We'll include the difference in the affordability calculation.
  • We treat let properties as self-financing where the property is let on an AST. And the rent received is at least 165% of the current mortgage payments.
  • Evidence of the latest three months’ rental payments using the Applicant’s latest three months' bank statements.^
  • Pay the rental by Direct Debit / Standing Order.
  • Unless they're owned as part of a property letting business, we'll review each rental property owned by your client one by one. See Rental Income from a Letting Business.
  • We can't use rental income from properties let abroad. However, you should key the mortgage details into the application where the mortgage is continuing. Where the mortgage debt is in a foreign currency, it should be converted to sterling.

There is no requirement to obtain past payment history proof for foreign currency mortgages. Normal requirements apply to mortgages in sterling secured on properties abroad.

^If your client has an existing Nationwide current account or mortgage, there’s no need for you to provide their statement(s) if it’s generated as a case requirement. Complete this form, then Scan and Attach it to clear the requirement.

If you're completing a Let to Buy application with The Mortgage Works, then you can find further guidance in our Let to Buy processing guide.


Outgoings

We'll need to consider any regular outgoings your client has in addition to their income for affordability. These include:

  Outgoing examples
Credit
commitments:
  • Outstanding credit card balances. This including store cards, mail order and budget accounts.
  • Outstanding mortgage balances. This includes mortgages held abroad.
  • Monthly payments for personal loans and hire purchases with more than 6 months to run.
  • Deferred purchase agreements with more than 6 months to run. This includes payments both current or future.
Non-Credit commitments
(monthly outgoings):
  • Child care
  • School fees
  • CSA / Maintenance
  • Additional cost for financial dependents
  • Student loans
  • Monthly travel costs for regular travel (e.g. to work and school) - to include for example:
    • Season ticket loan deductions
    • Rail/Bus company deductions that the customer confirms will be regular
    • Regular car costs e.g. fuel, car tax, parking fees and car insurance
  • Any other regular expenses your client wants us to consider when assessing affordability.
Non-Credit commitments
(annual outgoings)
  • Council Tax
  • Ground rent
  • Service charges
  • Buildings insurance
  • Shared ownership rent 

For joint applications, if your clients' are splitting their outgoings, input half the amount against each applicant.


Adverse Credit

Where there is adverse credit, we apply a range of factors to determine how we assess applications.

If your client has previously had an Individual Voluntary Arrangement (IVA), we may consider the case if this has been discharged for at least 3 years. The application may be subject to a more detailed underwrite.

We won’t normally lend if applicants are three or more months in mortgage arrears, depending on when the arrears occurred. We can consider applications where there are less mortgage arrears, although this may be subject to a more detailed underwrite.

We'll consider lending to applicants that have current or previous defaults depending on:

  • the value
  • the date registered.

The application may be subject to a more detailed underwrite.


Employment criteria

View what proofs we require for different types of employment

Read our employment criteria

A-Z criteria

Search our A-Z criteria to find what you’re looking for

A-Z criteria

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