Mortgage affordability calculation: Secondary income

Is secondary income, like a salary from a part-time job or freelance work accounted for in mortgage affordability calculations?

Greetings,

The short answer: It depends

A secondary income is generally included in mortgage calculations when two people share liability for a mortgage. The income of the second person sharing responsibility for a mortgage is normally counted as secondary income.

For example, if a married couple mortgage a home together, one spouse's income will be counted as primary income and the other spouse's income will be counted as secondary income.

Returns on invested wealth, pensions, income from additional part-time employment and variable salary components may also be accounted for, but only if these are ongoing and sustainable. Income is considered to be sustainable if you are likely to earn that income steadily in the foreseeable future.

Here too, lenders have the flexibility to interpret "sustainable income" as best suits them.

Ask lenders which income they include in mortgage calculations before you apply to mortgage a home. Online mortgage providers generally let you calculate whether or not you meet affordability requirements by filling out an online form.

Best regards from Moneyguru

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