Commission and bonus income
If a meaningful share of your pay arrives as commission or bonus, the lender you apply to matters more than almost anything else on your file. The same payslips produce very different borrowing figures depending on how much of that income a lender counts, over what period it averages it, and whether it treats the income as contractual or discretionary.
Why lenders discount it
Commission and bonus are variable by definition, and a lender is testing whether you can meet a repayment for decades rather than this year. Discounting variable income is a reasonable response to that. The problem is that the discount is applied bluntly, at rates that differ enormously between institutions, and applied to someone whose commission has been consistent for six years it can understate their real capacity substantially.
Contractual versus discretionary
This distinction does a lot of work. Commission paid under a defined structure, where the calculation is set out in your employment agreement, reads very differently from a bonus paid at the employer's discretion. Some lenders will count a high proportion of contractual commission and very little discretionary bonus. Where your agreement documents the structure, that document is worth putting in front of the right lender.
Averaging and the trend
Most lenders average over one or two years. On a rising trend, a two-year average understates your current position, and a lender that uses the most recent year reads the same file far more generously. On a falling trend the opposite applies, and the conservative reading may be the honest one. Which approach suits you depends on the direction your income is moving, which is precisely why placement matters.
What unlocks more of it
Two years of payslips and both PAYG summaries establish the pattern. An employment letter that describes the commission structure accurately, rather than calling it a bonus, can change the classification. Consistency across employers within the same industry helps where you have changed jobs. None of this is a trick; it is evidencing income that genuinely exists.
What decides how much gets counted
Four variables, and they compound.
Commonly somewhere between half and most of the averaged figure, and the range between lenders is wide enough to change the suburb you can buy in.
One year or two. On a rising income the difference is substantial. See how averaging works.
A documented commission structure is treated more favourably than a discretionary bonus at most lenders.
Two years of payslips, both PAYG summaries and an accurate employment letter. What to gather.
Commission a big share of your package?
Charles can show what different lenders would actually count before an application goes to the most conservative one.
Commission and bonus questions
How much of my commission will a lender count?
It varies more than almost any other input on a home loan file. A common approach is a percentage of a one or two-year average, but the percentage differs widely, and some lenders distinguish sharply between contractual commission and discretionary bonus. On commission-heavy packages the spread between lenders frequently exceeds a hundred thousand dollars of borrowing capacity.
Do I need two years of history?
For the fullest treatment, usually yes, and some lenders will work with one year where the rest of the file is strong and the income is contractual. Continuity within the same industry generally counts even where you have changed employers, which matters for people who move between firms in sales-driven roles.
Is a bonus treated the same as commission?
Often not. Commission paid under a documented structure tends to be treated more favourably than a bonus paid at the employer's discretion, because one is contractual and the other is not. If your commission is documented in your employment agreement, that document is worth providing rather than leaving the classification to assumption.
My commission has grown a lot. Does averaging hurt me?
It can. A two-year average of a rising income understates where you are now, while a lender that assesses on the most recent year reads it accurately. That is a placement decision rather than a change to your circumstances, and it is one of the clearest cases where the choice of lender decides the outcome.
What if my income dropped last year?
Then a conservative reading may be the accurate one, and it is better to plan on it than to search for a lender that will overlook it. Where the drop has a clear explanation, extended leave, a role change, a restructure, that explanation belongs in the application rather than being left for an assessor to guess at.
Related guides
General information only, not credit or financial advice. Professional lending policies, eligible occupations and loan-to-value thresholds vary by lender and change over time. Eligibility is confirmed against current lender policy in an assessment; nothing on this page is a promise that any lender will approve any application.
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