Commission Income Mortgage
Commission is often the larger half of an estate agent, recruiter or salesperson package. It is also the half most likely to be halved by a lender, which changes what you can actually borrow.
- The percentage Pepper Money publishes for commission
- Why a low basic salary is the real constraint
- How many years of history are needed
- What evidence supports a commission case
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The half that gets halved
Pepper Money publishes commission at fifty per cent, in the same group as an annual or quarterly bonus. Overtime and a monthly bonus are used at one hundred per cent. So commission sits in the more cautious category regardless of how regularly it arrives or how consistent it has been.
For anyone whose package is commission-heavy this is the whole issue. A 25,000 pound basic with 35,000 pounds of commission is a 60,000 pound job. Assessed with commission halved it becomes 42,500 pounds. That is a reduction of nearly thirty per cent in the figure the mortgage is calculated from, and it happens before affordability is even considered.
The practical consequence is that the basic salary does far more work than most commission earners expect. Two people earning the same total, one with a high basic and one with a high commission element, will be offered materially different amounts. It is worth knowing that before you agree a package or plan a purchase.
Lenders differ, and some treat consistent commission more generously than others, so this is a case where the right lender matters a great deal. Our bonus income page covers bonuses, and our how many income sources lenders count page covers the cap some lenders place on the number of income sources. HMRC explains how variable pay sits within your overall earnings in its guidance on Income Tax rates and allowances.
At a Glance
What halving commission does to a package
The first row is the published Pepper Money percentage. The worked examples below it use that percentage to show the effect on three identical total packages with different structures. They are illustrations, not quotations.
| Package | Total earnings | Assessed with commission at 50 per cent | Reduction |
|---|---|---|---|
| High basic, low commission | 60,000 pounds (50,000 basic + 10,000 commission) | 55,000 pounds | 8 per cent |
| Balanced | 60,000 pounds (40,000 basic + 20,000 commission) | 50,000 pounds | 17 per cent |
| Commission heavy | 60,000 pounds (25,000 basic + 35,000 commission) | 42,500 pounds | 29 per cent |
Criteria correct as at 14 August 2026. Commission percentage from the Pepper Money Mortgage Criteria Guide, correct as at 14 August 2026. The worked examples apply that percentage arithmetically to illustrate its effect and are not quotations, offers, or a statement of any lender lending decision. Other lenders apply their own percentages. Criteria change without notice. Lender criteria change without notice and this table is a general guide, not advice or an offer of credit. Your own circumstances, the property and the lender’s assessment at the time will determine what is actually available to you.
What a commission case needs
Consistency is the argument. Two years of payslips showing commission arriving every month is far stronger than a strong recent quarter. You can confirm that any firm advising you is authorised on the FCA Register.
Where to go next
The pages most often read alongside this one.
How Much Bonus Will A Lender Use?
Monthly, quarterly and annual bonuses are treated very differently. The percentage matters.
Overtime Income Mortgage
Regular overtime is often used in full. Occasional overtime often is not.
How Many Income Sources?
Some lenders cap the number of income sources per applicant. That cap can decide the case.
Second Job Mortgage
Whether a second job counts usually turns on how long you have held it and whether the hours overlap.
Professionals With Complex Income
Bonus, commission, overtime, multiple roles and income that does not fit a standard payslip.
Zero Hours Contract Mortgage
Length of service and stability of hours matter more than the contract label.
Self-Employed Mortgages
The main guide: how lenders assess self-employed income, what they ask for and which lenders are worth approaching.
How Much Can I Borrow?
See what your income could realistically support before you speak to a lender.
How we place a self-employed or complex income case
Specialist lenders underwrite manually, so how the income is evidenced and presented genuinely changes the outcome.
Establish how you are actually classed
Lenders do not all draw the line in the same place. Precise treats anyone with a shareholding of 25% or more, or who is responsible for paying their own tax and National Insurance, as self-employed. Getting this right first decides which criteria apply to you.
Read the accounts the way an underwriter will
We work from your tax calculations, tax year overviews and finalised accounts rather than a rough turnover figure, because the number a lender uses is often materially different from the number you think of as your income.
Match the income shape to the right lender
Latest year or average, salary and dividends or share of net profit, one year of accounts or two – these are lender policy choices. We place you against published criteria rather than guessing.
Package the case properly
Specialist lenders underwrite manually. A clear note explaining a dip in profit, a change of trading style or a new contract usually carries more weight with an underwriter than the raw figure on its own.
Plan the next few years
Trading history builds. We look at whether waiting for one more set of accounts, or how you draw income between now and then, would open up materially better options at your next remortgage.
Read More About Variable Income
Additional income is counted very differently from one lender to the next.
Self-Employed Mortgage Guide
How lenders actually read accounts, day rates and dividends.
Complex Income Mortgages
Bonuses, dividends, trust and overseas income read the way lenders read them.
How Much Deposit Do You Need?
What each deposit size actually reaches, and what staying small costs you.
How Much Can I Borrow?
A realistic borrowing figure before you start viewing properties.
Find out what your commission is really worth
Send us your basic and your commission over two years. We will show you what different lenders would work from before you commit to a purchase price.
Read more about our bonus income, overtime income or self-employed mortgages guide.
Commission Income Mortgages - Frequently Asked Questions
How much of my commission will a lender use?
It varies by lender. Pepper Money publishes commission at fifty per cent, grouped with annual and quarterly bonuses. Other lenders apply their own percentages and some treat consistent monthly commission more generously. Because it varies so much, this is a case where lender choice does most of the work.
Why is commission treated more cautiously than salary?
Because it is not guaranteed. Salary continues whether or not you hit a target. Commission depends on performance, on the market and often on factors outside your control. Applying a percentage is how a lender accepts the income while allowing for the possibility that it falls.
Does a low basic salary really matter that much?
Yes, more than most commission earners expect. On a 60,000 pound package with commission halved, a 50,000 pound basic is assessed at 55,000 pounds while a 25,000 pound basic is assessed at 42,500 pounds. Same total earnings, very different borrowing capacity.
How many years of commission history do I need?
Two years is the common expectation, evidenced through payslips and P60s. One year is sometimes accepted where commission is contractual rather than discretionary. Where you have recently moved into a commission-based role, expect the earlier salaried history to carry more weight for now.
Is monthly commission treated better than quarterly?
With some lenders yes, with others no. Pepper Money groups commission at fifty per cent without distinguishing frequency, whereas it does distinguish between monthly and annual bonuses. That inconsistency across lenders is precisely why the percentage should be checked rather than assumed.
What if my commission has grown steadily?
A clear upward trend helps, but many lenders will still average across two years rather than take the latest figure. Where the growth is significant and sustained, evidence that the current level has continued into this year is the most useful thing you can provide.
Does a guaranteed commission element count in full?
A contractually guaranteed minimum is treated more favourably than a purely discretionary scheme, and some lenders will use it at a higher percentage. The guarantee has to appear in the contract or scheme rules, not simply be reliable in practice.
Can I combine commission with a bonus?
Sometimes, but watch for caps. Pepper Money publishes a maximum of two income sources per applicant, so someone with salary, commission and a bonus may find one excluded. Which two you present becomes a real decision on those cases.
What if my commission dropped last year?
Expect the lower figure to carry weight, and expect to be asked why. A market-wide downturn affecting everyone in your sector is easier to explain than an individual drop. Either way, addressing it in writing at submission is better than waiting for the question.
Should I ask for a higher basic instead?
For mortgage purposes it is usually the stronger position, because basic salary is used in full by every lender. If a restructure of the same total package is genuinely available, it is worth considering well before you apply rather than after.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.