Halifax Intermediaries is cutting the proportion of bonus, commission and overtime income that can be used in a borrower’s affordability assessment.
The lender says that from tomorrow it will only consider 30 per cent of income from these sources in its affordability test, down from 60 per cent previously.
In an email to brokers Halifax says: “As the current situation continues to impact the level and types of income being received by clients and at this time of continued uncertainty, temporary changes are being made to ensure we continue to lend responsibly and support our clients during this difficult time.”
The lender says it is making the change “to reflect there may be an increased element of variance in these income types”.
Halifax has also clarified its position on several other income issues.
Certain self-employed cases, where it does not deem it necessary for underwriters to carry out a review, will no longer require three months’ bank statements.
Most contractor applicants will no longer need to be reviewed by underwriters.
Contractors who are providing a copy of their contract as proof of income, will also be required to supply their latest bank statement showing their salary going in or their latest payslip.
