Getting a mortgage with a complex income

Not everyone has a predictable or reliable income. For those who are self-employed or who have a complex income for other reasons, it can be more difficult to get a mortgage.

But it’s certainly not impossible. Here’s what you need to know about complex credit mortgages.

To secure a mortgage, you obviously need an income. If you’re an employee, this income typically takes the form of a salary that is paid monthly in identical instalments – nice and predictable.

But not everyone has that kind of income.

Self-employed people, freelancers, contractors, business owners, odd-jobbers, gig workers, workers in creative industries, itinerant workers and professional investors (to name a few examples) may all have far less steady incomes – even if they earn the same overall amount or perhaps more.

The result is what is often called a ‘complex income’. Having a complex income can make mortgage providers more wary of lending to you. So here are some things to bear in mind if you’re in this position and want to buy a home.

What is a complex credit mortgage?

A mortgage is deemed complex if the potential borrower has a financial situation or needs that differ from those of the average person looking to use a loan to purchase a property.

This is a broad definition that includes lots of potential types of borrowers. The most common forms of ‘complexity’ are:

Complex credit

The average borrower will have some debts, such as a credit card or student loan. If you have a lot of debt, most lenders will factor this in when deciding whether to lend to you. 

This doesn’t necessarily mean you have ‘bad’ credit, but it can still make lenders more cautious.

Complex income

If you have multiple income streams coming from employment, commission, investments, rents or other sources, you could be classed as having a complex income.

Note that this doesn’t necessarily mean you are self-employed. You might just have a job where your income fluctuates due to things like bonuses, overtime and so on.

Variable income

Most employees earn a set wage that is paid in regular instalments.

This makes it easy for lenders to see how much liability these borrowers can realistically take on. This becomes much harder if a person’s income varies over time.

Adverse credit

This means people who, in one way or another, either have credit ratings that fall below the standard acceptance rate due to defaults, arrears and missed payments or those that are subject to county court judgments, debt management plans or bankruptcy proceedings.

What is complex income?

Many people are breaking out of the defined employment patterns that have held sway for the last century.

In the ‘gig economy,’ people may have multiple income streams or may make the majority of their annual income during one part of the year. These are examples of what would be considered complex income.

For those who are self-employed, freelance or a contractor, work might come in peaks and troughs.

People with multiple part-time jobs may have differing levels of income throughout the year. Others may live mostly on investment income, dividends or government benefits.

Equally, a person may be an employee but be on a commission-only contract or rely on a regular bonus. Landlords might rely largely on their rental income, which may fluctuate as tenants come and go.

One common scenario of complex income is where a person wants to buy a flat and rent out one or more rooms to friends or co-tenants.

The rent that these tenants pay certainly counts as income, but many lenders are less likely to consider it as ‘reliable’ income when deciding how much someone can borrow or afford to repay.

Will my complex income affect a mortgage application?

While increasingly common for mortgage applications, having complex income can still raise a few questions.

Lenders prefer applications that are simple, tick all the boxes and don’t need a lot of extra footwork or risk management.

People with complex incomes may have gaps in their employment and earnings or a patchy credit history.

All of these factors will impact the affordability calculations that lenders use to determine how much they will lend.

While many lenders will still be willing to offer a mortgage, they may want a larger deposit or charge a higher interest rate to offset some of the risk.

How can I get a mortgage with complex income?

There are specialist lenders out there, but being as prepared as possible is essential.

Use our mortgage calculator, and make sure to work through our mortgage checklist to get a free assessment of the strength of your mortgage application.

Making use of a mortgage broker could also be a good move, as they will have experience with a wide range of personal and financial circumstances and specialist lenders.

They will be able to guide you through the mortgage application process and connect you with one of the many lenders that will be happy to try and grant you a mortgage in principle.

Here's a mini complex income mortgage checklist:

✅ Use a mortgage calculator to understand your affordability

✅ Work through a mortgage checklist for a free assessment of your application strength

✅ Prepare extra documentation (tax returns, contracts, bank statements, rental agreements)

✅ Speak to a specialist mortgage broker for access to the right lenders

✅ Be ready to offer a larger deposit if needed

Are there other types of complex mortgage?

The good news is that mortgages are not as black and white as they may first appear. As the numbers of self-employed people continue to grow, the mortgage market is adapting to accommodate a wider range of borrowers.

In recent years, there has been a growth in more complex mortgages such as self-build, retirement interest-only, listed building, unconventional property and guesthouse mortgages.

This is a good thing for borrowers, who can now be more confident that they will be able to make their dreams a reality even if their financial circumstances deviate from the reliable, predictable income that the majority still have.

For those with complex incomes, getting in touch with a mortgage broker should be the first step.

Get expert mortgage advice

Navigating the mortgage market with a complex income can be challenging, but it's far from impossible.

While traditional lenders may be cautious, specialist mortgage providers and brokers are equipped to handle diverse financial situations.

By preparing thoroughly and seeking expert advice, you can find a mortgage that suits your unique circumstances.

Remember, the mortgage landscape is evolving, and more options are becoming available to accommodate non-standard income profiles.

Lenders want to lend so, with the right approach, you could turn your homeownership dreams into reality.

Let Unbiased match you with a mortgage adviser who can help you navigate the complexities of securing a mortgage with a complex income and find the best solutions tailored to your financial situation.