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

Using Commission Income for a Home Loan in Australia

Commission income can help you qualify for a home loan, but lenders usually assess it more carefully than base salary.

Some lenders may use commission if you have received it for long enough. Others may average it over one or two years, shade it, or exclude it if it is too new or inconsistent.

This can be frustrating if commission is a normal part of your income.

You may earn a modest base salary but a strong total income once commission is included. If the lender only uses your base salary, your borrowing power may look much lower than your real earnings.

This guide explains how Australian lenders may assess commission income for a home loan, based on current policy research.

Can commission income be used for a home loan?

Yes, commission income may be used for a home loan if the lender is satisfied that it is regular, verifiable and likely to continue.

A lender may look at:

• how long you have received commission
• whether commission is part of your normal role
• whether commission appears on your payslips
• whether your year-to-date income supports the amount
• whether your current income is similar to previous years
• whether commission is increasing or decreasing
• whether your employer can confirm the arrangement
• whether the lender shades commission income
• whether your loan still passes servicing if only part of the commission is used

Commission can be valuable, but the lender needs to decide what portion of it is reliable enough to include.

Why lenders treat commission differently from base salary

Base salary is usually predictable.

Commission can change from month to month depending on sales results, targets, market conditions, employer rules or customer demand.

A lender may ask:

• is the commission guaranteed or performance-based?
• has it been received for a long enough period?
• is the latest commission unusually high?
• is the income seasonal?
• does the borrower rely heavily on commission?
• would the loan still be affordable if commission reduced?
• should the lender use all of it or only part of it?

This is why your total annual income and your lender-assessed income may be different.

What types of borrowers earn commission?

Commission income is common across many industries.

Examples include:

• sales representatives
• account managers
• business development managers
• real estate agents
• mortgage brokers
• finance brokers
• car salespeople
• recruitment consultants
• insurance advisers
• retail sales staff
• software sales professionals
• travel consultants
• property consultants
• medical sales representatives

The occupation matters because some roles have a long and stable commission pattern, while others can be more volatile.

Is commission income harder to use than overtime?

Often, yes.

Overtime is usually linked to hours worked. Commission is often linked to performance, sales or business conditions.

This can make commission harder to predict.

A lender may be more cautious if:

• commission has only recently started
• commission is paid irregularly
• commission depends on one large deal
• the industry is volatile
• the income has dropped recently
• the borrower has changed employer
• the borrower has moved into a new sales role
• there is not enough history to average the income

Some lenders may still use commission, but they may want a longer history than they would for regular overtime.

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

How long do you need to receive commission before a lender will use it?

There is no single rule across all lenders.

Some lenders may consider commission after six months if it is regular and supported by payslips. Others may want 12 months or two years of history.

Based on current policy research, lenders may use approaches such as:

• using commission only after a minimum history is shown
• requiring six months of evidence
• requiring 12 months of evidence
• requiring two years of evidence
• using the lower of the latest year and previous year
• averaging income over one or two financial years
• using year-to-date evidence supported by prior-year income
• requiring employer confirmation that commission is ongoing

If commission is a major part of your income, a longer history can make the application stronger.

How do lenders calculate commission income?

Lenders may calculate commission income in different ways.

A lender may use:

• 100% of verified commission income
• 80% of verified commission income
• 50% of commission income
• a six-month average
• a 12-month average
• a two-year average
• the lower of current year and previous year commission
• year-to-date commission annualised
• commission shown in an ATO income statement
• no commission if it does not meet policy

The difference can be significant.

For example, if your base salary is $75,000 and your commission is $45,000 per year, one lender may use most of your total income while another may use only your base salary and part of the commission.

What documents do you need to use commission income?

The lender will usually need evidence that commission has been received and is likely to continue.

You may need:

• recent payslips
• payslips showing year-to-date income
• ATO income statement
• PAYG payment summary
• employment contract
• employer letter
• commission structure or plan
• bank statements showing salary credits
• previous financial year income evidence
• tax return, in some cases
• explanation of any recent income changes

If commission is paid separately from your base salary, the lender may need extra evidence to match the payments.

What should an employer letter include?

An employer letter can help where commission is regular but not clear from payslips.

A useful employer letter should ideally confirm:

• your full name
• your role
• your employment type
• your start date
• your base salary
• your commission arrangement
• whether commission is ongoing
• whether commission is regular
• how commission is calculated
• whether the current commission level is expected to continue
• employer contact details

The letter should match your payslips, employment contract and salary credits.

Can real estate agents use commission income for a home loan?

Yes, real estate agents may be able to use commission income, but the application can be more detailed.

Real estate income can vary significantly depending on listings, sales volumes, market conditions and agency structure.

A lender may look at:

• base salary, if any
• commission history
• sales consistency
• employment history
• income shown in payslips
• income shown in tax records
• whether the borrower is PAYG or self-employed
• whether the commission is likely to continue
• whether income has been stable over time

A PAYG real estate employee may be assessed differently from a self-employed agent or contractor.

Can recruitment consultants use commission income?

Yes, recruitment consultants may be able to use commission income if there is enough history.

Recruitment commission may be regular for some borrowers and very uneven for others.

The lender may ask:

• how long you have worked in recruitment
• how long you have been with the current employer
• whether commission is paid monthly, quarterly or irregularly
• whether your commission has been stable
• whether your base salary is enough for servicing without full commission
• whether the current year is in line with past income

If your commission depends heavily on a few large placements, the lender may average or shade it.

Can car salespeople use commission income?

Car sales commission may be accepted by some lenders if it is consistent and properly verified.

A lender may review:

• base salary
• commission history
• payslip evidence
• year-to-date income
• previous financial year income
• employer confirmation
• industry experience
• recent income trend

If commission has been stable for at least 12 months, the application may be stronger than if the income only recently increased.

Can mortgage brokers or finance brokers use commission income?

Mortgage brokers and finance brokers may have income that includes trail, upfront commission, wages, dividends or business income.

The lender’s treatment depends on the structure.

A PAYG broker may be assessed using payslips and employment income.

A self-employed broker may be assessed using business income, tax returns, financials or alt doc evidence.

A lender may ask:

• are you PAYG or self-employed?
• is income paid as salary, commission, dividends or profit?
• how long has the business or employment arrangement existed?
• is commission recurring or one-off?
• are expenses deducted before income is assessed?
• does the income appear in tax returns?

This type of application needs careful classification before choosing a lender.

What if your commission has recently increased?

A recent increase in commission can help, but lenders may not automatically use the higher figure.

The lender may ask:

• why has commission increased?
• is the increase sustainable?
• was it caused by one large sale?
• is it due to a promotion or new role?
• is it supported by year-to-date income?
• does the previous financial year support it?
• can the employer confirm it is likely to continue?

If the increase is recent, some lenders may use a lower average until there is more history.

What if your commission has decreased?

If commission has decreased, the lender may use the lower amount.

Lenders usually prefer a conservative approach with variable income.

A decrease may happen because of:

• lower sales volume
• change in employer
• change in market conditions
• new commission structure
• fewer leads
• industry slowdown
• personal leave
• change in role

If the latest year is lower than previous years, the lender may use the latest lower amount or ask for an explanation.

Can commission be used if you changed jobs?

It may be possible, but changing jobs can make commission harder to use.

A lender may be more comfortable if:

• you stayed in the same industry
• you moved into a similar role
• your commission structure is similar
• you have a strong history of earning commission
• you have already received commission from the new employer
• your new income is supported by payslips

A lender may be more cautious if:

• you moved into a new industry
• this is your first commission role
• your income is mostly commission
• you have not received commission yet
• your new commission is much higher than before
• the role is still in probation

Changing jobs does not always stop the application, but it can reduce the number of lenders willing to use commission income.

Can commission income be used with a small deposit?

It may be possible, but high-LVR lending can be more sensitive.

If you borrow above 80% of the property value, lenders mortgage insurance may apply. The lender and mortgage insurer may both need to accept the commission income.

A small-deposit application may be stronger if:

• commission has a long history
• income is consistent
• employment is stable
• credit history is clean
• debts are low
• savings history is clear
• the loan still passes using shaded commission

If the loan only works by using 100% of recent commission, some lenders may be cautious.

Can commission income be used when refinancing?

Yes, commission income may be used for refinancing if it meets the lender’s policy.

This may help if you are:

• switching to a lower rate
• consolidating debt
• accessing equity
• changing loan structure
• refinancing from a specialist lender
• moving from interest-only to principal and interest

The lender will still assess whether the commission is regular, verified and likely to continue.

If the refinance relies heavily on commission, strong evidence becomes important.

What if commission is paid annually or quarterly?

Commission paid annually or quarterly can be used by some lenders, but it may need a longer history.

A monthly commission pattern is easier to assess because it appears regularly on payslips or bank statements.

Annual or quarterly commission may require:

• prior-year income evidence
• ATO income statement
• employer confirmation
• commission plan
• payslips showing payment dates
• tax return evidence
• history of repeated payments

A lender may average the income over one or two years rather than annualising one recent payment.

Can bonus income and commission income both be used?

Sometimes.

Bonus and commission are both variable income, but lenders may apply different rules to each.

A lender may separately assess:

• base salary
• commission
• bonus
• overtime
• allowances
• second job income
• dividends
• self-employed income

If your total income includes several variable components, the lender may use different percentages or history requirements for each one.

This can make the borrowing calculation more complex than a simple annual salary figure.

Does commission income reduce borrowing power?

Commission income can reduce borrowing power if the lender shades it or excludes it.

For example, your actual total income may be $130,000. But if the lender uses your $80,000 base salary plus only part of your commission, the assessed income may be much lower.

Borrowing power may be affected by:

• short commission history
• irregular payment pattern
• declining commission
• recent job change
• lender shading
• mortgage insurer rules
• lack of employer confirmation
• commission not shown clearly on payslips

This is why a borrowing-power estimate should be based on lender policy, not just total income on your employment contract.

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

10 common mistakes borrowers make with commission income

1. Do not assume every lender will use all of your commission.
2. Do not rely on one large commission payment.
3. Do not ignore previous financial year income.
4. Do not apply before checking whether the lender shades commission.
5. Do not assume commission is treated like base salary.
6. Do not forget to explain a recent increase or decrease.
7. Do not hide a job change or probation period.
8. Do not rely on projected future commission.
9. Do not apply to multiple lenders without checking policy first.
10. Do not assume a bank decline means commission cannot be used anywhere.

How to improve your chances before applying

Before applying, it helps to prepare your commission evidence clearly.

Useful steps include:

• collect recent payslips
• check whether payslips show year-to-date income
• collect your ATO income statement
• keep PAYG or prior-year income evidence
• ask your employer for a commission letter if needed
• keep a copy of your commission plan
• explain any income increase or decrease
• show regular salary credits in your bank account
• avoid changing commission roles before applying, where possible
• reduce unnecessary debts where practical
• compare lender policy before submitting the application

The easier it is to verify your commission, the more options you may have.

Should you wait before applying?

Sometimes waiting can help.

Waiting may improve your application if:

• commission has only just started
• you have only received one large payment
• you recently changed employer
• you recently moved into a commission-based role
• your year-to-date income is too short
• your previous financial year income was much lower
• you are close to having 12 months of commission evidence
• your loan depends heavily on commission income

But waiting is not always necessary.

You may be ready to apply if:

• your commission has a solid history
• income is consistent
• payslips clearly show the commission
• your ATO income evidence supports the figure
• your employer can confirm the arrangement
• your deposit and credit history are strong
• the right lender can use the income

A broker can compare whether applying now or waiting would give you better lender options.

Example scenarios

Scenario 1: Sales employee with regular monthly commission

You have a base salary and receive commission most months.

Your payslips and year-to-date income show a clear pattern.

Some lenders may use part or all of the commission if the history is strong enough.

Scenario 2: Real estate agent with irregular commission

You earn large commission payments, but the timing varies depending on sales.

A lender may average income over a longer period or use a lower figure if the income is uneven.

Scenario 3: New commission role

You recently moved into a sales role where commission is expected but has not been received yet.

Many lenders may not use projected commission until there is actual payment history.

Scenario 4: Commission has dropped this year

Your previous-year commission was strong, but this year is lower.

The lender may use the current lower amount or ask why the income has changed.

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

Yes, you may be able to use commission income for a home loan.

The strongest applications usually have:

• consistent commission history
• payslips showing the income
• year-to-date income evidence
• prior-year income evidence
• employer confirmation, where required
• stable employment
• income that is normal for the role
• clean credit history
• manageable debts
• a lender whose policy accepts commission income

Commission can make a real difference to borrowing power, but the lender needs to be comfortable that the income is reliable.

Need help applying with commission income?

A mortgage broker can help compare lenders that may accept commission, bonus income, variable income and sales-based income.

We can review your payslips, year-to-date income, employer letter, deposit and borrowing position before you apply.

If your income includes commission, speak with a mortgage broker who understands how different lenders assess variable employment income.