Barclays has announced further enhancements to its mortgage affordability calculations, increasing the proportion of bonus, overtime and commission income that can be considered when assessing applications.
The update allows the bank to take into account up to four times a customer’s basic salary plus allowances for these income types.
Previously, Barclays capped variable income at a value equal to the borrower’s basic salary plus allowances.
Under the new approach, customers in commission-led or variable income roles will be able to demonstrate greater affordability.
For example, a customer earning £30,000 in basic salary and £120,000 in commission could now be assessed on total income of up to £150,000, compared with £60,000 under the previous rules.
The change follows a series of recent updates to Barclays’ lending criteria aimed at improving accessibility across the market, including enhanced affordability calculations for self-employed customers, interest-only borrowers and buy-to-let applicants.
Lee Chiswell, head of mortgages at Barclays, said: “We know that affordability is probably the greatest barrier for most consumers who want to buy a home.
“We’ve taken a long look at how we can support customers, particularly first-time buyers, and as a result have made several tweaks to our lending criteria.
“Taken together, these will make all the difference for a range of people with different income types, getting people into homes that would previously have been out of reach.”
