Income criteria

Acceptable income and proofs required

Please see the below tables for the type of income and proofs we accept. You can download our packaging support guide for top tips when submitting proofs.

Validating proofs

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

Interest Only

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. We'll make an assessment using their primary basic source of income. You can't use Secondary income, bonus, overtime or commission.

Work Report

To reduce the number of proofs we need, we’ve introduced a new tool in NFI Online called 'Work Report from Experian'. This tool can automate income verification and provides us with digital payroll data which can remove the need to upload payslips proofs on cases where a match is made.

How it works:

• NFI Online includes an additional screen in the ‘Employment and Income section’
• Here we'll ask you to confirm consent from your client to share their Employer and National Insurance number with Experian
• If the company is registered to the service, and the data matches, this should remove the need to upload the payslip.

You'll be able to use the Work Report check for:

• Employed income
• Basic salary (this will not include any bonus, overtime or commission income)
• Primary employer income (you can't use this for more than one employer).

You can only choose to use Work Report during the initial DIP stage of the application. If you choose ‘No’, you'll be unable to amend it at a later date.

If you choose Work Report and amend a submitted application, you may be requested to provide additional proofs. We'll be in contact if we require these.

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

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:

Additional income - not labelled bonus, overtime and commission

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 choose to follow the ZHC/temporary worker approach, or:

• Treat the guaranteed element as basic income.
• Treat as overtime anything over and above the guaranteed element.
• Key the applicant as permanent or employed (won't need to use the criteria for ZHC/temporary workers).

You must provide a copy of the applicant’s employment contract, along with the latest 3 month payslips. This is to verify any overtime 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

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.

*The only two SA302’s that are acceptable are those covering the years 2022/23 and 2023/24.

Retirement income

Income from other sources

^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.

* Our system will automatically consider a property to be self-financing if the rental income is at least 160% of the mortgage payment.

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

*** The only two SA302’s that are acceptable are those covering the years 2022/23 and 2023/24.

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.

* 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, and it fails affordability:

• 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

* 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.

**** Applies where the applicant has retired and is drawing an income from a flexible drawdown plan.

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.

Extra help with affordability

Depending on your client’s circumstances, we may be able to lend more when you choose a 5-10 year fixed rate mortgage.

• House Purchase (Home Movers) clients
• Employed or self employed
• Minimum income of £40k for a sole applicant or £70k for joint applicants.

Meeting the criteria doesn’t mean we’ll always be able to offer extra help

We won’t accept:

• Applications in conjunction with any Scheme or Non-Standard Ownership type (such as Shared Ownership or Right to Buy)
• Interest only
• Porting
• Applications for second properties. This includes holiday homes, dependent relative or for work reasons. Extra help will only be available if:
• an existing property remains in the background and
• the new property will be the main residence.

Next steps

• If the affordability calculator result for your client says we might be able to lend more with a 5 or 10 year fixed rate, log in to NFI Online to complete a Decision in Principle (DIP)
• In the DIP, choose a Fixed Rate (5 years or more) on the ‘Product Type’ question in Loan Requirements.
• If you key a DIP on a standard lending basis but this is unaffordable, you’ll have the option to resubmit on a 5 or 10 year fixed rate.

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.
• We won't accept foreign currency income.
• Private/Occupational Pension Schemes:
• You must prove the latest annual pension illustration. The retirement age on the illustration should match (or be dated prior to) the applicant’s declared retirement age.
• Where the illustration assumes the tax-free cash won't be taken on retirement, we'll use 75% of the annual pension income figure quoted. This needs to be calculated and keyed manually.
• Where the illustration already caters for the 25% PCLS, the full income can be keyed/used.
• If the pension illustration quotes ‘Low’, ‘Medium’ and ‘High’ growth rates, income will be assessed assuming the ‘Medium’ growth rate.
• For applicants who have not yet retired (but the mortgage term takes them into retirement) pension plans offering flexible drawdown options (such as SIPPs) can be considered towards the expected retirement income.
• The applicant must provide an annual pension statement showing their projected retirement income (confirmation of current/future fund value only is not acceptable).

• For joint applications where one applicant is working and the other is a homemaker, student or unemployed (and not contributing towards affordability), and the term takes the applicant who is a homemaker, student or unemployed into retirement, then a proof of a pension isn't required.

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.
• We won't accept foreign currency income.

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're 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'll 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're let and satisfy the following:

• The rent received is less than 160% 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 160% 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, where the mortgage is continuing, you should key the mortgage details into the application. 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, 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:

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.