Can You Use Bonus Income for a Home Loan in Australia?

Using Bonus Income for a Home Loan in Australia

Yes, you may be able to use bonus income for a home loan in Australia.

Some lenders may include part of your bonus income if it has been consistent, ongoing and properly verified. Others may require one or two years of history. Some lenders may use 80% of the bonus, average the last two years, use the lower of two figures, or exclude the bonus entirely if it looks irregular, discretionary or one-off.

This is where bonus income can become confusing.

A borrower may receive a strong annual bonus and assume the lender will use it in full. But lenders often treat bonus income as variable income, not guaranteed salary. They may want evidence that the bonus is part of your normal employment package and likely to continue.

This guide explains how Australian lenders may assess bonus income, annual bonuses, performance bonuses, incentive payments and foreign bonus income, based on current policy research.

Can bonus income be used for a home loan?

Yes, some lenders may use bonus income for a home loan.

A lender may consider bonus income if:

• the bonus has been paid before
• the bonus is consistent
• the bonus is likely to continue
• the bonus is connected to your employment
• the bonus can be verified
• the bonus is not a one-off payment
• your base income is stable
• the bonus is shown on payslips or income statements
• the lender’s policy accepts bonus income
• the loan passes servicing using the accepted bonus amount

The key issue is not just whether you received a bonus. The lender needs to decide how much of that bonus can be relied on for a mortgage assessment.

What counts as bonus income?

Bonus income can come in many forms.

It may include:

• annual performance bonus
• half-yearly bonus
• quarterly bonus
• monthly bonus
• sales incentive
• employer incentive payment
• productivity bonus
• retention bonus
• sign-on bonus
• discretionary bonus
• profit-share bonus
• executive bonus
• foreign currency bonus
• project completion bonus
• Christmas bonus
• end-of-financial-year bonus

Different bonus types may be treated differently.

A regular annual performance bonus may be easier to use than a one-off sign-on bonus. A guaranteed contractual bonus may be stronger than a discretionary employer payment.

Why lenders treat bonus income carefully

Lenders treat bonus income carefully because bonuses can change from year to year.

A bonus may depend on:

• employer performance
• personal performance
• sales results
• company profit
• industry conditions
• economic conditions
• manager discretion
• employment contract terms
• time in role
• whether targets are met
• whether the borrower remains employed

Because of this, a lender may not use 100% of the bonus.

They may shade it, average it or require a history before relying on it.

Bonus income vs base salary

Base salary is usually treated more strongly than bonus income.

Base salary is generally expected to continue if your employment continues. Bonus income is often less certain.

For example, a lender may use 100% of your base salary but only part of your bonus income.

This matters if your income package is made up of:

• a lower base salary plus large bonus
• commission plus bonus
• sales incentives
• annual performance payments
• employer profit share
• discretionary rewards
• executive remuneration

A borrower earning $120,000 base salary plus a $40,000 bonus may not be assessed the same as a borrower earning a guaranteed $160,000 base salary.

How much bonus income will lenders use?

There is no single rule across all lenders.

Based on current policy research, some lenders may use a reduced percentage of bonus income for servicing. A common approach is to use 80% of acceptable bonus income.

Other lenders may use:

• 100% of bonus income in limited cases
• 80% of the bonus income
• the lower of the latest year and the two-year average
• the average over two years
• the most recent annual bonus
• the year-to-date figure annualised, if policy allows
• the amount shown in an employer letter
• no bonus income if it is not consistent or ongoing

This is why the same borrower can get different borrowing power with different lenders.

Why do some lenders only use 80% of bonus income?

Some lenders shade bonus income because it is variable.

Using 80% is a way of allowing for the possibility that the bonus may reduce in future.

For example, if your acceptable bonus income is $20,000 per year, the lender may only use $16,000 for servicing.

This can reduce borrowing power, but it may still be much better than the lender excluding the bonus entirely.

Bonus shading may apply even where the bonus has been paid regularly.

Do lenders need one year or two years of bonus history?

It depends on the lender.

Some lenders may consider the most recent annual bonus if it is consistent, ongoing and a condition of employment.

Other lenders may want a two-year history, especially where the bonus is annual, irregular or discretionary.

A lender may ask for:

• one year of bonus evidence
• two years of bonus evidence
• current year-to-date payslip
• previous financial year income statement
• tax return
• Notice of Assessment
• employer letter confirming bonus payments
• evidence that the bonus is ongoing

If you only received a bonus once, your options may be narrower.

Can one annual bonus be used for a home loan?

Possibly.

Some lenders may consider the most recent annual bonus, especially if the bonus is part of your employment package and can be verified.

This may be stronger if:

• you are in permanent employment
• the bonus is part of your contract
• the bonus has just been paid
• the employer confirms it is ongoing
• the bonus is not a one-off sign-on payment
• the bonus is consistent with your role
• your base income is stable
• the lender’s policy allows one-year bonus income

Some lenders may still want a longer history before relying on it.

Can a discretionary bonus be used?

A discretionary bonus can be harder to use than a contractual bonus.

A discretionary bonus means the employer chooses whether to pay it. It may not be guaranteed.

A lender may ask:

• has the bonus been paid before?
• how often is it paid?
• is it expected to continue?
• is it linked to performance?
• is it written into the employment contract?
• can the employer confirm the payment history?
• is the bonus consistent year to year?
• is the bonus needed for the loan to pass servicing?

If the bonus is highly discretionary or irregular, the lender may reduce it or exclude it.

Can a guaranteed bonus be used?

A guaranteed bonus may be stronger than a discretionary bonus.

For example, your contract may state that you receive a fixed annual bonus or guaranteed incentive payment.

A lender may still ask for evidence, but the bonus may be easier to support if it is:

• written in the employment contract
• paid regularly
• fixed in amount
• not dependent on uncertain performance targets
• confirmed by the employer
• shown on payslips or income statements
• expected to continue

The more certain the bonus is, the stronger the case for using it.

Can a sign-on bonus be used for a home loan?

Usually, a sign-on bonus is difficult to use as income.

A sign-on bonus is often a one-off payment for starting a role. It may help your cash position, but it may not help your ongoing borrowing power.

A lender may treat a sign-on bonus as:

• one-off income
• savings or deposit funds, if already received
• not acceptable for servicing
• acceptable only as funds to complete, depending on evidence

If the bonus will not continue, a lender is unlikely to rely on it for mortgage repayments.

Can a retention bonus be used?

A retention bonus may be difficult unless it is recurring or guaranteed.

A retention bonus is often paid to encourage you to stay with an employer for a certain period.

The lender may ask:

• is the bonus one-off or recurring?
• when is it paid?
• has it already been received?
• is it conditional on staying employed?
• is it part of normal remuneration?
• will it continue after settlement?
• can it be verified?

If the retention bonus is one-off, it may be treated differently from regular bonus income.

Can a performance bonus be used?

Yes, a performance bonus may be used by some lenders if there is enough evidence.

A performance bonus may be assessed based on:

• payment history
• frequency
• amount
• employer confirmation
• income statements
• payslips
• tax returns
• whether performance targets are realistic
• whether the bonus is expected to continue

If the bonus has been paid consistently, a lender may use part of it. If it was unusually high or only paid once, the lender may be more cautious.

Can a Christmas bonus be used?

A Christmas bonus may be hard to use unless it has a consistent history.

Small seasonal bonuses are often irregular and discretionary.

A lender may be less likely to rely on a Christmas bonus if:

• the amount changes each year
• it is not contractual
• it is paid at the employer’s discretion
• it is small or one-off
• it is not needed for servicing
• it cannot be verified over time

If it has been paid consistently for several years, some lenders may consider it as part of annual bonus income.

Can a sales incentive be used as bonus income?

Yes, but sales incentives may sometimes be assessed like commission rather than bonus income.

A sales incentive may be paid:

• monthly
• quarterly
• annually
• when targets are reached
• when deals settle
• when revenue targets are met
• as part of a commission plan

A lender may ask whether the income is:

• bonus income
• commission income
• incentive income
• performance income
• regular variable income

The classification matters because evidence and calculation methods may differ between lenders.

Bonus income vs commission income

Bonus income and commission income are related, but they are not always assessed the same way.

Commission is often linked directly to sales or revenue generated. Bonus income may be linked to personal, team or company performance.

A lender may treat both as variable income, but the documents and averaging method may differ.

Commission income may require:

• salary credits over a period
• employer letter
• income statement
• tax return
• evidence of commission structure

Bonus income may require:

• payslip showing bonus payment
• employer letter
• annual income statement
• payment summary
• tax return
• evidence bonus is ongoing

If your income includes both commission and bonus, the lender may assess each component separately.

Related research: Can You Use Commission Income for a Home Loan in Australia?

Can frequent bonus payments be used?

Frequent bonus payments may be easier to assess if they appear regularly on payslips.

For example, you may receive incentives every month or every pay cycle.

A lender may review:

• whether the payments are regular
• how long they have been paid
• whether they are part of the employment contract
• whether they are consistent
• whether the payslip shows enough year-to-date history
• whether the income should be treated as bonus or commission
• whether the amount should be shaded

Where lender policy is unclear, the application may need to be checked with the lender before submission.

What if bonus income is paid irregularly?

Irregular bonus income is more difficult.

A lender may not annualise a single high bonus payment unless there is a history.

For irregular bonuses, the lender may ask for:

• two years of income evidence
• employer letter
• tax returns
• ATO income statements
• payslips showing payment
• bank credits
• explanation of bonus structure
• confirmation that bonuses are ongoing

If the bonus is not predictable, the lender may use a conservative figure or exclude it.

How do lenders calculate bonus income?

Lenders may calculate bonus income in different ways.

They may use:

• 80% of the most recent annual bonus
• 80% of the two-year average
• the lower of the latest year and the two-year average
• the lower of year-to-date annualised income and prior year income
• the bonus amount shown on payslip
• the bonus amount shown in an employer letter
• the amount shown in an ATO income statement
• a manually shaded amount
• no bonus income if the evidence is not strong enough

This is why lender selection can materially change borrowing power.

Example of bonus income shading

Imagine you receive a $25,000 annual bonus.

A lender that accepts 80% of the bonus may use $20,000 per year.

If the lender uses a monthly servicing amount, this may be treated as about $1,667 per month before tax.

Another lender may average the last two years.

If you received $25,000 this year and $15,000 last year, the average is $20,000. If the lender then uses 80%, it may assess $16,000.

Another lender may use the lower of the two years, which could be $15,000, then shade it.

The difference can be significant.

Can bonus income improve borrowing power?

Yes, bonus income can improve borrowing power if the lender accepts it.

It may help if:

• your base salary is not enough on its own
• the bonus is regular
• the bonus has a strong history
• the lender uses a reasonable percentage
• your debts are manageable
• your expenses are controlled
• your LVR is acceptable
• mortgage insurance rules allow it

But bonus income may not help if:

• it is one-off
• it is irregular
• it is discretionary
• it cannot be verified
• you only received it once
• the lender excludes bonus income
• the loan fails even after bonus income is included

Related research: Do Credit Card Limits Affect Your Home Loan Borrowing Power?

Does the bonus need to be paid before applying?

Usually, it is stronger if the bonus has already been paid.

A lender can verify a paid bonus through:

• payslip
• income statement
• tax return
• bank credit
• employer letter
• payment summary

If the bonus is expected but not yet paid, the lender may be less willing to use it.

An expected future bonus may be difficult because:

• it could change
• it may not be guaranteed
• it may be delayed
• it may be conditional
• the employer may not confirm the amount
• the borrower may not meet performance criteria

Some lenders may consider future income in limited cases, but paid and verified bonus income is usually stronger.

What documents do lenders need for bonus income?

The exact documents depend on the lender, but you may need:

• payslip showing the bonus payment
• year-to-date payslip
• employer letter
• employment contract
• ATO income statement
• PAYG payment summary
• tax return
• Notice of Assessment
• bank statement showing salary credit
• prior year final payslip
• bonus plan document
• incentive scheme document
• written confirmation that the bonus is ongoing

The lender may use one or several documents to confirm the bonus.

What should an employer letter for bonus income include?

An employer letter can help verify bonus income.

A useful employer letter may include:

• employer letterhead
• employer name
• employer ABN or ACN
• employer contact details
• employee name
• role or position
• employment type
• start date
• base salary
• bonus amount paid
• bonus payment date
• bonus frequency
• whether bonus income is ongoing
• whether the bonus is discretionary or contractual
• whether the bonus is part of normal remuneration
• name and position of the person signing

The letter should be consistent with payslips and income statements.

Can a payslip prove bonus income?

Yes, a payslip can help prove bonus income if it clearly shows the payment.

A lender may check:

• bonus amount
• payment date
• pay period
• year-to-date income
• tax withheld
• whether the bonus is separate from ordinary pay
• whether the payment matches the bank credit
• whether the payslip is recent
• whether the employer is identifiable

If the payslip only shows one bonus payment and there is no history, the lender may ask for more evidence.

Can tax returns prove bonus income?

Yes, tax returns may help verify bonus income, especially where the bonus is annual or irregular.

However, tax returns may not always show the bonus separately. They may only show total employment income.

A lender may need extra evidence if they need to separate:

• base salary
• bonus income
• commission income
• allowances
• overtime
• termination payments
• leave payouts
• one-off income

Tax returns can be useful, but they may not be enough by themselves if the lender needs to identify the bonus component.

Can ATO income statements prove bonus income?

ATO income statements can help, especially when confirming annual employment income.

They may be used with:

• current payslip
• previous financial year income statement
• employer letter
• tax return
• bank salary credits

A lender may compare the ATO income statement to current payslips to see whether total income is consistent.

If the ATO statement includes one-off income, the lender may adjust the figure.

What if your bonus is included in year-to-date income?

This can make the calculation more complex.

A year-to-date payslip may include base salary, overtime, allowances, commission and bonus income in one total.

The lender may need to separate the bonus from the base income.

They may ask:

• is the bonus shown separately?
• what part of the year-to-date figure is base income?
• what part is bonus?
• was the bonus one-off?
• does the payslip show ordinary hours?
• does the employer letter break down the income?
• does prior year evidence support the bonus?

If the lender cannot separate the income types, they may use a more conservative calculation.

What if your latest bonus was higher than normal?

A higher-than-normal bonus may not be fully accepted.

A lender may compare the latest bonus to prior years.

They may ask:

• why was the bonus higher?
• was it a one-off result?
• did the employer have an unusually strong year?
• was it linked to a specific project?
• did your role change?
• will the higher bonus continue?
• does the employer confirm it is ongoing?

The lender may use a lower historical average rather than the latest high figure.

What if your latest bonus was lower than normal?

A lower latest bonus can also affect the calculation.

Some lenders may use the lower of recent figures if income has declined.

For example, if your last two bonuses were $30,000 and $12,000, the lender may not simply average them or use the higher one.

They may ask whether:

• bonus income is declining
• performance has changed
• employer conditions have changed
• the lower figure is more realistic
• the bonus is still ongoing

A recent decline may lead to a lower assessed income.

What if you did not receive a bonus last year?

If you missed a bonus in the most recent year, the lender may be cautious.

The lender may ask:

• why was no bonus paid?
• was the company affected by external factors?
• did you change jobs?
• were you on leave?
• did you miss performance targets?
• has the bonus resumed?
• can the employer confirm it is ongoing?

If the bonus has not been paid recently, it may be difficult to rely on.

What if you changed jobs and now receive a bonus?

A new bonus structure can be difficult to use immediately.

If you recently changed jobs, a lender may not accept the bonus until it has been paid and supported by a history.

The lender may consider:

• your prior bonus history
• whether the new role is in the same industry
• whether the bonus is guaranteed
• whether the bonus is contractual
• whether the new employer has paid it yet
• whether the bonus is realistic for the role
• whether your base salary alone supports the loan

If the bonus is untested in the new role, many lenders will use base income only.

What if you are on probation and receive bonus income?

Being on probation can make bonus income harder to rely on.

The lender may be concerned about both employment stability and variable income.

The application may be stronger if:

• you have prior industry experience
• bonus income has been received in similar roles before
• the new role is permanent
• base income is enough to support the loan
• the bonus is not essential for servicing
• the bonus is contractual or clearly ongoing

If the loan only works using new bonus income while you are on probation, lender options may be limited.

Can executives use bonus income for a home loan?

Yes, executive bonus income may be considered by some lenders.

Executive income can be complex because remuneration may include:

• base salary
• annual bonus
• short-term incentives
• long-term incentives
• shares
• options
• deferred compensation
• profit share
• car benefits
• allowances

Lenders may be comfortable with base salary and regular cash bonuses, but they may be more cautious with shares, options or deferred benefits.

The lender may need to identify which income is cash, taxable, received and ongoing.

Can bank employees use bonus income?

Bank employees, finance workers and corporate employees may receive structured annual bonuses.

A lender may consider this income if it is verified and ongoing.

Evidence may include:

• payslip showing bonus
• employer letter
• annual remuneration statement
• ATO income statement
• bank salary credits
• prior year income evidence

If the bonus is discretionary or linked to company performance, the lender may shade it or use a historical average.

Can sales workers use bonus income?

Sales workers may receive commission, bonus or incentive income.

The lender may need to understand the income structure.

They may ask:

• is the income commission or bonus?
• is it paid monthly, quarterly or annually?
• is there a base salary?
• is the bonus tied to individual sales?
• is the bonus tied to company performance?
• how long has the income been received?
• what percentage can be used?

Sales workers can often use variable income, but the evidence requirements may be stricter.

Can medical or healthcare workers use bonus income?

Some healthcare workers may receive incentive payments, retention payments, regional bonuses, shift-related payments or performance income.

A lender may review:

• whether the payment is bonus or allowance
• whether it is recurring
• whether it is part of the employment contract
• whether it is taxable
• whether it is expected to continue
• whether it appears on payslips
• whether it should be shaded

The exact treatment depends on the payment type.

Can foreign bonus income be used?

Foreign bonus income may be accepted by some lenders, but it is usually assessed more conservatively.

Foreign bonus income may involve two layers of shading:

• a foreign currency conversion haircut
• a variable income haircut

For example, if a bonus is paid in foreign currency, the lender may first convert it to Australian dollars and then only use a portion of the converted income.

The lender may ask for:

• foreign payslips
• employment contract
• employer letter
• tax documents
• bank statements
• currency conversion details
• evidence the income is ongoing

Foreign bonus income can be complex, and not all lenders accept it.

Can bonus income be used as genuine savings?

Sometimes, bonus income that has been paid into your bank account may help show available funds.

A net bonus received and held in a bank account may be considered as an acceptable source of funds by some lenders.

This is different from using bonus income for servicing.

A paid bonus may help with:

• deposit
• funds to complete
• savings buffer
• paying down debts
• reducing LVR
• avoiding lenders mortgage insurance

But the lender may still want to verify the source of funds.

Should you use your bonus to pay off debt before applying?

Sometimes using a bonus to reduce debt can improve borrowing power more than using the bonus as income.

This depends on your situation.

Using a bonus to pay off debt may help if you have:

• credit cards
• personal loans
• car loans
• buy now pay later accounts
• tax debt
• overdrafts
• high monthly commitments

Paying down debt can improve servicing because it reduces ongoing repayments.

However, using the bonus for debt may reduce your deposit, so the trade-off needs to be checked.

Should you use your bonus as deposit instead?

A bonus can be useful as deposit funds if it has already been paid.

This may help if:

• your deposit is short
• you need funds to complete
• you want to reduce LVR
• you want to avoid mortgage insurance
• you need a savings buffer
• you want to cover stamp duty or costs

A lender may ask for evidence that the bonus was received from your employer and is now held in your account.

Can bonus income help with a refinance?

Yes, bonus income may help with a refinance if the lender accepts it.

A refinance may involve:

• lowering your rate
• changing loan structure
• consolidating debts
• accessing equity
• switching lenders
• removing a guarantor
• extending interest-only

The lender will still assess whether the bonus is acceptable, consistent and ongoing.

If your base salary is enough, the bonus may not be needed. If your refinance relies on bonus income, evidence becomes more important.

Related research: Can Australian Expats Refinance a Property and Release Equity Using Foreign Income?

Can bonus income be used for an investment loan?

Yes, bonus income may be used for an investment loan if accepted by the lender.

The lender will assess:

• base income
• accepted bonus income
• existing mortgage repayments
• investment loan repayments
• rental income shading
• property expenses
• other debts
• living expenses
• assessment buffers

Bonus income may help, but investment lending can still be limited by servicing rules.

Related research: Can You Use Investment Income from Shares or Managed Funds for a Home Loan?

Does LVR matter when using bonus income?

Yes, LVR can matter.

LVR means loan-to-value ratio. It compares the loan amount to the property value.

A lower LVR may give the lender more comfort. A higher LVR can make the application more sensitive.

Bonus income may be assessed more carefully if:

• the loan is above 80% LVR
• lenders mortgage insurance applies
• the bonus is needed to pass servicing
• the bonus has limited history
• the bonus is discretionary
• the property is non-standard
• the borrower has other credit concerns

If you are relying heavily on bonus income, a larger deposit may improve lender options.

Does lenders mortgage insurance affect bonus income?

Yes.

If lenders mortgage insurance applies, the insurer may have its own approach to variable income.

A lender may accept your bonus income, but mortgage insurance may still require stronger evidence.

LMI can matter where:

• your deposit is below 20%
• your bonus income is needed to pass servicing
• the bonus is irregular
• you recently changed jobs
• your income is variable
• there is limited income history
• you have other credit risks

This is why bonus-income applications should be checked before making an unconditional offer.

Can first-home buyers use bonus income?

Yes, first-home buyers may be able to use bonus income, but the overall application matters.

A lender may review:

• deposit source
• genuine savings
• base salary
• bonus history
• employment stability
• HECS or HELP debt
• credit cards
• personal loans
• living expenses
• LVR
• mortgage insurance

If bonus income is needed to qualify, the lender will usually need strong evidence.

What if your bonus is paid after settlement?

A future bonus paid after settlement may not help the initial approval.

A lender usually assesses your position at application and settlement.

If the bonus will be paid after settlement, it may not be available for:

• deposit
• funds to complete
• debt repayment before settlement
• servicing, unless policy allows future bonus income

If you are relying on an upcoming bonus, timing matters.

What if your bonus is paid before formal approval?

If the bonus is paid before formal approval, it may help if the lender can verify it.

It may support:

• income assessment
• savings evidence
• debt reduction
• funds to complete
• cash buffer

You may need to provide:

• updated payslip
• bank statement showing payment
• employer letter
• updated income statement
• explanation of payment

If the bonus changes your loan position, tell your broker before approval.

What if bonus income is paid to a company or trust?

If bonus income is paid to a company or trust, it may not be treated as ordinary PAYG bonus income.

The lender may assess it under business, trust or self-employed income rules.

They may ask for:

• trust tax returns
• company financials
• personal tax returns
• distribution statements
• accountant letter
• business bank statements
• evidence of actual distributions

This is different from a PAYG employee receiving a cash bonus through payroll.

10 common mistakes with bonus income

1. Do not assume lenders use 100% of bonus income.
2. Do not assume one bonus payment is enough for every lender.
3. Do not rely on a future bonus that has not been paid.
4. Do not confuse commission income with bonus income.
5. Do not ignore whether the bonus is discretionary.
6. Do not assume a sign-on bonus counts as ongoing income.
7. Do not forget that foreign bonus income may be shaded twice.
8. Do not assume LMI will accept the same income calculation as the lender.
9. Do not apply without evidence of payment history.
10. Do not assume a high latest bonus will be accepted in full.

How to improve your chances of using bonus income

Before applying, it helps to prepare the bonus evidence clearly.

Useful steps include:

• collect payslips showing bonus payments
• collect your latest income statement
• collect prior year income evidence
• get an employer letter confirming bonus history
• confirm whether the bonus is ongoing
• confirm whether the bonus is contractual or discretionary
• separate base salary from bonus income
• keep bank statements showing bonus credits
• avoid relying on one-off payments
• check whether LMI applies
• compare lender policy before submitting the application

Good evidence can make a major difference.

Should you wait before applying?

Sometimes waiting can help.

Waiting may improve your options if:

• your bonus is due soon
• the bonus has not yet been paid
• you will soon have two years of evidence
• you recently changed jobs
• your latest bonus was unusually high
• your income statement is not yet available
• you need the bonus for deposit
• you need the bonus to pay down debts
• lenders mortgage insurance applies

You may not need to wait if:

• your base income is enough
• your bonus has already been paid
• you have strong bonus history
• your employer can verify the income
• your LVR is conservative
• the lender accepts one-year bonus evidence

A broker can compare whether applying now or waiting would improve your lender options.

Example scenarios

Scenario 1: Annual bonus paid for two years

You receive a yearly performance bonus and can show payments in the last two financial years.

Some lenders may average the bonus and use a percentage of it for servicing.

Scenario 2: One recent bonus

You received your first annual bonus this year.

Some lenders may consider part of it if it is ongoing and supported by employer evidence. Others may want another year of history.

Scenario 3: Large one-off sign-on bonus

You received a sign-on bonus when starting a new job.

The lender may treat it as a one-off payment and not use it as ongoing income.

Scenario 4: Monthly incentives

You receive monthly incentive payments in addition to base salary.

The lender may assess them as bonus, commission or incentive income and may require year-to-date or prior year evidence.

Scenario 5: Foreign bonus income

You receive a bonus in foreign currency.

The lender may convert the amount to Australian dollars and then shade it for both foreign currency and variable income risk.

Scenario 6: Bonus used for deposit

Your bonus was paid into your account and you want to use it as part of your deposit.

The lender may accept it as funds to complete if the source can be verified, but it may still not use the bonus as ongoing income.

So, can you use bonus income for a home loan?

Yes, you may be able to use bonus income for a home loan in Australia.

The strongest applications usually have:

• stable base income
• bonus paid consistently
• bonus verified by payslips or income statements
• employer confirmation where needed
• evidence the bonus is ongoing
• bonus income received for at least one to two years
• no reliance on one-off payments
• manageable debts
• suitable deposit or equity
• lender policy that accepts bonus income

Bonus income can help borrowing power, but the lender may not use all of it.

Need help using bonus income for a home loan?

A mortgage broker can help compare lenders that may consider annual bonus income, performance bonuses, incentive payments, foreign bonus income and irregular bonus payments.

We can review your payslips, income statements, employer letter, bonus history, LVR, deposit and borrowing power before you apply.

If you receive bonus income and want to buy or refinance, speak with a mortgage broker who understands how different lenders assess variable income.