Income criteria

Acceptable income and proofs required
      Income from employment (including second jobs)
      Additional income - not labelled bonus, overtime and commission
      Income from self employment
      Income from other sources
      Benefit income
      Casual employment
Unacceptable income
Affordability
Stress testing
Like for like
Lending into retirement
Clients with additional properties
Outgoings


Acceptable income and proofs required

Download our packaging support guide for top tips when submitting proofs

We'll seek to validate your client's income using credit bureau information. If we can successfully do this, we won't request to see any proofs. Please don't attach proofs to an application if they aren't requested, as this may delay the progress of your case.


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Income from employment (including second jobs*)

Download our guide to payslip requirements

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 Latest payslip

Bonus, overtime and commission

You must manually average the figures across the proofs provided and these must be keyed accurately.

For additional income not clearly labelled as bonus, overtime and commission, please check the additional income table.

Weekly - latest 8 payslips

  • use the average of the 8 payslips and key as Weekly

Fortnightly - latest 6 fortnightly payslips

  • add the value of the bonus, overtime or commission, divide by 12 and key as Weekly

Four Weekly - latest 3 payslips

  • add the value of the bonus, overtime or commission, divide by 3 and key as Four Weekly

Monthly - latest 3 payslips

  • add the value of the bonus, overtime or commission, divide by 3 and key as Monthly

Quarterly bonus and commission - latest 3 quarterly payslips or award letters/statements from the employer showing payment (the oldest can't be more than 12 months old)

  • add the value of the bonus or commission, divide by 3 and key as Quarterly

Half Yearly bonus and commission – latest 4 half yearly payslips or award letters/statements from the employer showing payment (the oldest can't be more than 25 months old)

  • add the value of the bonus or commission, divide by 2 and key as Annual

Annual bonus and commission - latest 2 annual payslips or award letters/statements from employer showing payment (the oldest can't be more than 25 months old)

  • add the value of the bonus or commission, divide by 2 and key as Annual

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

Employer's references will only be requested if your client is working temporarily via an agency.

Additional income - not labelled bonus, overtime and commission

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
eg monthly payslips 1, 2 and 3 = £100
Average = £300/3 = £100 monthly basic
Treat as overtime
eg quarterly payslip 1 = £100, payslip 2 = £100, payslip 3 = £100
Average = £300/3 = £100 quarterly overtime
Additional income is variable across all payslips* Treat as overtime
eg payslip 1 = £100, payslip 2 = £200, payslip 3 = £300
Average = £600/3 = £200 monthly overtime
Additional income is the same or variable but not on all payslips* Treat as overtime
eg payslip 1 = £100, payslip 2 = £100 but £0 on payslip 3
Average = £200/3 = £66.67 monthly overtime
*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.

Income from self employment

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

Acceptable income Proofs required
Income figures are required for the last two years.
Sole trader/partnerships - Applicant's share of net profit
  • For loans of up to £500,000, accountant's certificate covering at least the last two years (HMRC Tax Assessment forms are also acceptable for sole traders). View our employment criteria for more information.
  • For loans above £500,000, accountant's certificate covering at least the last two years and two years' accounts.
Director's salary
  • For loans of up to £500,000, accountant's certificate covering at least the last two years.
  • For loans above £500,000, accountant's certificate covering at least the last two years and two years' accounts.
Director's dividends
  • For loans of up to £500,000, accountant's certificate covering at least the last two years.
  • For loans above £500,000, accountant's certificate covering at least the last two years and two years' accounts.
Fixed Term Contract
  • For loans of up to £500,000, accountant's certificate covering at least the last two years (HMRC Tax Assessment forms are also acceptable for sole traders, or the latest employment contract if income is being assessed as employed). View our employment criteria for more information.
  • For loans above £500,000, accountant's certificate covering at least the last two years and two years' 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.

Income from other sources

Acceptable income Proofs required
State retirement pension (SRP)* Latest annual statement of pension/due on retirement
Pension Credits* Latest Pension Credit Award Notice
Private Pension*
  • Latest annual statement of pension/due on retirement, or
  • Latest payslip/letter/P60 from pension provider
*see Lending into Retirement for more information
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.
Dividend income from a Portfolio of shares Accountant's certificate
Dividend income from an applicant that owns a share in a business Accountant's certificate
Income from a company the applicant owns that will continue to provide an income into retirement Accountant's certificate
Rental income from a mortgage free property

Latest 3 months' bank statements^ or letter from an ARLA registered letting agent showing receipt of 3 months' rental income. Rental income must be paid by Direct Debit/Standing Order.

Rental income from short term or holiday lets, "rent a room" lodgers or foreign property is unacceptable.

Rental income from a letting business with a mortgage Treat as self employed income. 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.
Maintenance**
  • A copy of the maintenance agreement, received under a Court Order, a CSA assessment or a written private agreement drawn up between the separating parties and
  • Three months' bank statements^ as evidence of payment.

We'll only accept payments that have been received satisfactorily for at least three months (the lowest figure received in the last three months will be used for affordability). A written private agreement will need to include, the amount paid each month, to whom the payments are made, the name of the child/children the agreement relates to, and the period the maintenance will be paid for.

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

Foster Income Treat as self employed 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
Income Protection Insurance Treat as employed income
  • Latest payslip/letter confirming the monthly income

Benefit income**

Acceptable income Proofs required
Benefit income must be keyed in the relevant fields under 'Other Income'. Benefits must be likely to be paid for the foreseeable future, at their current level or higher and must not be used as income if the client, or proof provided, confirms the payment is about to stop.
Child Benefit (accepted if neither applicant's total income is more than £50,000)
  • Latest award notice (all pages and dated within the last 12 months) or
  • Latest bank statement showing credit of Child Benefit^
Benefits Specifically for the Disabled The following benefits paid because of a disability are an acceptable source of income provided the applicant can provide their current award letter:
  • Incapacity benefit
  • Disability living allowance (DLA) for a person aged 16 or over
  • Reduced Earning Allowance (REA)
  • Disablement living allowance on behalf of a child under 16
  • Attendance allowance
  • Personal Independence Payment (PIP)
  • Industrial Injuries Disablement Benefit
  • War Disablement Pension
  • Armed Forces Compensation Scheme
Working and/or Child Tax Credits Most recent "Full" or "Amended" award notice for the current tax year (all pages).
Only accepted if all named on the mortgage are the same as all named on the award notice.
Income used is the lowest figure for each kind of tax credit.
Universal Credit

We're in the process of formulating our policy with regards to Universal Credit. In the interim, for any cases where you wish for us to consider using your clients’ Universal Credit for affordability, please send their latest full Universal Credit statement (which may be available either in paper format or online), along with the names of the proposed applicant(s), to UniversalCredit@nationwide.co.uk. You'll be provided with a figure to key in to your DIP within 48 hours.

The following benefits are acceptable provided the applicant can provide their award/payment letter:

  • Employment & Support Allowance (ESA - Support Group only)
  • Adoption allowance
  • Widowed parents allowance
**Applications where income is made up primarily of benefits and maintenance are likely to be declined.

^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. Simply complete this form, then Scan and Attach it to clear the requirement.

Casual employment

Zero Hours Contracts, Piece Work, NHS Bank Nurses, Retained Firefighters, Armed Forces Reserve and Supply Teachers

  • The applicant must have been employed by the same company for a minimum of 12 months. Applicants employed as NHS Bank Nurses or Supply Teachers may have worked for different NHS Trusts or schools. This is acceptable if they've been doing this for at least 12 months.
  • The income can only be used where it's a secondary income on the application; it doesn't have to be a second job.
  • Income must be evidenced by the latest P60 and payslip. We will use the lower of the annualised year to date figures from the latest payslip, or the latest P60.
  • Bonus, overtime or commission can't be used for these contract types.

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Unacceptable income

  • Expenses / Subsistence Payments
  • Mileage / Fuel Allowance
  • First Aid
  • Broadband and Phone Allowance
  • Shadow Pay
  • Educational Grants / Bursaries
  • Teaching and Learning Responsibility 3 (TLR) payments
  • Housing Benefit
  • Foreign Currency
  • Jobseeker's Allowance
  • Income Support
  • Income from lodgers
  • Third jobs
  • Income from ad-hoc employment
  • Bereavement Allowance
  • Guardians Allowance

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Affordability

Maximum borrowing is based on individual affordability, up to a maximum of 4.75 times gross income. 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, after their mortgage repayments to cover their outgoings.

Top tips on affordability

  • Ask your client to provide their income proofs up front, and ensure they match the income they've declared, before you submit their application.
  • Remember to check the following for any further expenditure or outgoings: payslips; bank statements; credit reports (if available from your client)
  • Once you have the full picture on your client's outgoings, make sure they are all entered fully and accurately in the appropriate field when keying their affordability/DIP/application.

Affordability calculator

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


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Stress testing

We will conduct a stress test on all applications as part of our affordability assessment; this will be completed as part of the Decision in Principle. Where your client is porting an existing product to their new property, we may be required to stress test at a higher rate due to the interest rate of your client's existing product. Where this is required, we will conduct this additional stress test within NFI Online once you've selected that you would like to port the applicable account. Therefore, 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.


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Like for like

If your client(s) is an existing Nationwide mortgage customer moving home, and they fail affordability, we can 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. Term extensions are allowed unless the borrower(s) is already retired, the term extension takes the borrower(s) into retirement or further into retirement.

Where the application is 'Like for Like', we will suppress our need for Income Proof, all other proofs generated will be required.

The application will receive a 'Refer' decision (subject to our standard checks) and this will be reviewed by our underwriting team.

If any of your client(s) mortgage is on Interest only and meets the above criteria you will still be asked for Income Proof, but this will not be required unless requested by our underwriting team. You must manually appeal these cases through your BDM.


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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

  • Details of both current income and anticipated retirement income must be provided
  • The lower of the current income or anticipated retirement income is used for affordability purposes

Retirement is 10 years or more away

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

For remortgage clients and existing Nationwide borrowers wanting to borrow beyond the age of 75, please see borrowing in retirement for more information.


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Clients with additional properties

Where your client will own more than one property on completion of their new loan with Nationwide the maximum LTV is 85%. Purchase applications for these clients should be keyed as a Second Property even if the property being purchased will be your client's main residence.

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

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:

  • Let properties are treated as self-financing where the rent received is at least 145% of the current mortgage payments.
  • Where the rent received is less than 145% of the current mortgage payment, the difference will be included in the affordability calculation
  • Latest 3 months' bank statements^ or letter from an ARLA registered letting agent showing receipt of 3 months rental income.
  • Rental must be paid by Direct Debit / Standing Order.
  • Each rental property owned by your client will be assessed individually, unless they are owned as part of a property letting business (see above Rental Income from a Letting Business).
  • We cannot use rental income from properties let abroad, however you should still key the mortgage details into the application where the mortgage is continuing (if 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 but 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. Simply complete this form, then Scan and Attach it to clear the requirement.


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Outgoings

As well as considering your client's income for affordability, we'll also need to consider any regular outgoings they are committed to. These include:

Credit commitments:

  • Outstanding credit card balances, including store cards, mail order and budget accounts
  • Outstanding mortgage balances, including mortgages held abroad (see Clients with Additional Properties above for details of when mortgages are treated as self-financing)
  • 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, including current or future payments

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 expenditure your client would like 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 the outgoings are shared between your clients, you should key half the amount against each applicant.