What lenders actually do with bonus, commission and overseas income

Lenders are built around a borrower with one employer, one salary and a payslip every fortnight. Plenty of capable people do not look like that, and get assessed as though the difference were a risk rather than a shape.

Bonus, commission and overtime

Variable income is generally assessed at a percentage of the actual figure, over a required history. Both the percentage and the required history vary by lender.

Two years of consistent evidence is assessed considerably better than one strong year. A stable pattern beats a spike, even when the spike is larger.

Where the role is in an occupation with structurally consistent overtime — some emergency services and health roles — a smaller group of lenders will assess overtime at or near full value. It is worth checking whether that applies before settling for a conservative assessment.

Foreign income

Foreign income is assessable with a subset of lenders. Expect a discount on the gross figure for exchange rate movement, and expect the currency itself to matter — major currencies are treated better than minor ones, and some lenders publish currencies they will not consider at all.

Returning to Australia

This is the case large brokerages decline on sight. You have a signed employment contract but no local payslips yet.

Some lenders will assess on the contracted salary before the first pay cycle, particularly where the role is in the same field as your previous one. Others require a set number of cycles first. That single policy difference is frequently the entire application — and it is knowable in advance rather than discovered at assessment.

Several income sources at once

Salary plus a side business plus rent plus dividends is normal and entirely assessable. The difficulty is that each stream is verified differently and carries a different discount.

An application that presents them as one number invites the lender to assess the whole thing at the most conservative rate applicable to any part of it. Presenting each stream separately, with the right evidence attached to each, is slower to prepare and materially better on assessment.

The commitments side

HECS is treated as a committed expense while a balance remains. Where the balance is small relative to income, clearing it before applying can free more capacity than the balance costs. Where it is large, it rarely is. It is arithmetic with a definite answer — worth doing rather than guessing.

Credit card limits are assessed as though fully drawn. Reducing limits on cards you keep, and closing the ones you do not use, remains the cheapest borrowing-capacity improvement available to anyone.