Barclays includes bonuses in mortgage affordability calcs

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Barclays now takes into account bonuses in its affordability calculations as long as borrowers meet its income requirements.

Sole applicants must have a gross income of at least £75,000, excluding the bonus. With joint applications, one applicant must have at least a gross annual income of £75,000 or they must have a joint income of £100,000, excluding the annual bonus.

The lower of the current year’s bonus or the two-year average will be included in the affordability calculation.

Two years’ bonus history is required, which must be evidenced using the borrower’s P60 and the latest bank statement.

Chadney Bulgin mortgage partner Jonathan Clark says: “Woolwich have been aware for some time that their refusal to take anything other than basic salaries into account when calculating affordability was causing issues, so I’m pleased with this announcement.

“However, the relatively high income required will mean that it will be of limited use to applicants outside of London & the South-East.”