Specialist lender Pepper Money has revised its lending criteria to enhance mortgage affordability for its customers.
The lender will now consider 100% of variable income such as monthly bonuses, commissions, and overtime payments in its affordability calculations, a change from the previous 50%.
Additionally, 50% of annual or quarterly bonuses, commissions, and rental income can now also be included.
Pepper Money has also introduced a new 40-year term option to help customers spread payments over a longer period, thereby increasing disposable income.
Paul Adams (pictured), sales director at Pepper Money, said: “At Pepper Money, we’re always looking to respond to market trends and help customers to overcome the challenges that stand in the way of them achieving their goals.
“Mortgage affordability continues to be a challenge due to the ongoing cost-of-living crisis and higher interest rates.
“Our Specialist Lending Study identifies that customers’ monthly budgets are getting tighter due to increased food and energy costs.
“The introduction of 40-year terms not only helps to maximise affordability but also reflects shifting working trends, as people work until later in their life.”
