How Investment Banking Bonuses Are Assessed Across Different Lenders
Why the same bonus can support very different borrowing depending on the lender: the percentage each one counts, the averaging window, how a bonus becomes a borrowing figure, and which lenders may count all of it.
In short
An investment banking bonus rarely fails an affordability assessment on its own. What moves the number is the lender you take it to. Across the mainstream lenders on our panel, they differ on four things: what percentage of the bonus they count (anywhere from 50% to 100%), how they average it, how they treat a recent change of employer, and whether they cap it against base salary. The cash element is what gets assessed; the deferred stock portion of a banking bonus may be treated like any other share award and largely excluded. Put the same banker in front of two lenders and the borrowing figure can sit hundreds of thousands of pounds apart. This article explains where that variation comes from, how a lender turns a bonus into a borrowing figure step by step, and which kinds of lender may count all of it.
Who this is for
This article is for investment banking analysts, associates, vice presidents (VPs), and managing directors (MDs) whose bonus is a large share of total pay and who want to understand why lender choice changes the borrowing outcome so much. It covers how the assessment varies across the panel, how a single lender runs the calculation, the cash-versus-deferred split, the US dollar overlay, and the conditions lenders attach before counting a bonus in full. For the yes/no question and the evidence pack, start with Can I Use My Bonus for a Mortgage?; for the full career-stage picture, this sits beneath our investment banking mortgage guide.
Why does the same bonus produce different borrowing at different lenders?
You earn well. You will probably be fine. For many bankers, at most levels, that holds. The complication is not whether lenders accept bonus income, because many of them do. It is that they accept it on strikingly different terms, and the gap between the cautious end of the panel and the generous end is wide.
Two lenders can look at an identical P60 and arrive at borrowing figures that differ by a six-figure sum. The income is the same. The variable is the methodology applied to it: the set of rules each lender uses to decide how much of a discretionary bonus it is willing to rely on for the next 25 years. A mainstream affordability model is built around stable, salary-led pay. When the bonus dwarfs the base, as it does in many front-office banking roles, the model has to make a judgement, and lenders make that judgement differently.
This article is part of our broader guide to investment banking mortgages. The point of it is practical: once you can see where the panel differs, you can see why one lender quotes you a number that feels low and another quotes a number that feels right, and you can choose accordingly.
Director and Mortgage Adviser
Specialist mortgage broker for City professionals. David advises investment banking analysts, associates, VPs and MDs with bonus-led and deferred compensation on how lenders read their pay and which lenders read it most favourably.
What are the four things lenders differ on?
On the same bonus, four variables drive how much of your bonus a lender counts toward your income. Each lender combines them differently, and that combination is what explains a borrowing spread of hundreds of thousands of pounds on identical pay.
Percentage counted
This is where the spread is widest. Lenders may count anywhere from 50% to 100% of the bonus figure. A single discretionary year tends to sit at the cautious end; what moves a lender toward the higher proportions is a bonus you can evidence as a sustained, multi-year feature of your pay. The evidence behind the figure matters as much as the figure itself.
Averaging window
Many lenders work from a two-year average, or the lower of the latest year and the two-year average; some may use the latest year where it is higher and the record supports it. For an annual bonus this choice matters most when the figure has moved sharply from one year to the next, and where the bonus is paid in two instalments across the year the lender may want evidence covering both.
Recent job move
If you have changed employer recently, lenders diverge. Many want at least one bonus actually paid by your current employer before they will rely on it. Some then bridge the gap with the bonus from your previous employer in the same field; others fill the uncovered year with zero, which can roughly halve the average. A move is the one moment this axis bites, so it is worth knowing which lenders take which approach before you apply.
Cap against base
A few lenders cap the bonus they will include at a proportion of base salary, so a banker on a modest base relative to a large bonus loses a slice before the calculation even starts. Others apply no formulaic cap and let the loan-to-income (LTI) multiple do the limiting work instead. For bonus-heavy pay, the presence or absence of a cap is decisive.
No single lender is generous on all four at once, and the cautious ones are not cautious for the same reasons. One discards half the bonus on percentage but applies no cap; another counts the bonus in full but only where a multi-year record backs it. The practical task is matching the shape of your bonus to the lender whose four settings happen to suit it.
Criteria correct as of October 2026. Mortgage lending policies change regularly, for the latest advice, speak to us directly.
How does a lender turn a bonus into a borrowing figure?
The calculation tends to run in a similar order from lender to lender, even though the settings inside it differ. A lender may first separate fixed salary from variable pay, then classify the bonus by frequency and by whether it is contractual or discretionary, then pick the figure it will rely on, often the two-year average or the lower of the latest year and that average, and apply its percentage to it, then check any cap against base salary. Only after that does the loan-to-income (LTI) multiple apply, followed by the affordability stress test that can lower the figure again.
Four things tend to make the biggest difference to what survives that sequence. A consistent multi-year track record generally counts for more than one exceptional year. A bonus that materially exceeds base salary is more likely to be capped or discounted. Seniority helps: established senior roles with a settled bonus history tend to be read more favourably than junior or recently promoted positions where the record is short. And lender policy sits over all three: two lenders can assess the same income very differently, and the choice of policy frequently matters more than the income level.
Averaging is designed to smooth income, and it can work against you. Where income has stepped up after a promotion, one weaker year drags the average below what you now earn; where the latest year is the lower one, cautious lenders may work from that figure instead. In those cases the methodology, not the income, becomes the limiting factor, and the practical response is a lender whose method reads the latest year, or a delay until the record catches up with the role.
Lenders are generally focused on downside protection rather than peak earnings. Where bonuses have been paid consistently over several years, no single peak year is doing the work, and the borrowing asked for is proportionate to income, the assessment tends to land nearer the top of the range. Where income has been volatile, lenders may default to more cautious assumptions.
How does the shape of your bonus decide which lenders are generous to you?
The single biggest driver of how much of your bonus counts is not a label but evidence. Almost every banking bonus is paid annually, occasionally in two instalments six months apart, and almost all of it is discretionary: nothing in the contract obliges the bank to pay it again. Lenders know this, so what moves them from the cautious end of the range toward fuller recognition is being able to show the bonus as a sustained, recurring feature of your pay across more than one year. The size of the figure matters less than how convincingly you can evidence that it recurs.
Guaranteed bonuses are the exception people ask about, but they rarely apply to this audience, and they do not unlock a higher percentage in the way people expect. In banking a genuine guarantee almost only arises from a move: an amount offered to attract you from a competitor, or to compensate for deferred pay you forfeited by leaving. A guarantee that sits in the future, written into an offer but not yet paid, is not income a lender is likely to count at all. And once the guaranteed amount has been paid through the normal annual cycle, it is assessed like any other discretionary bonus. So a guarantee can help you reach that important first bonus from a new employer sooner, but it does not make a lender count more of your bonus than it otherwise would.
For these clients, then, the lever that moves the percentage is a track record. Lenders that start at 50% of a discretionary bonus may move toward fuller recognition where you can evidence it as a sustained, recurring feature of your pay over two or three years. That is one reason continuity at the same employer is worth protecting in the run-up to an application: it widens the pool of lenders willing to treat the bonus generously.
A recent move complicates this, and lenders handle it in noticeably different ways. Many want to see at least one bonus actually paid by your current employer before they will rely on the figure, and a sign-on guarantee does not stand in for that. Once you have that first bonus, some lenders may bridge the gap by combining it with the bonus you earned in the same field at your previous employer, giving you a fuller two-year picture. Others count only what the current employer has paid and fill the missing year with zero, which can roughly halve the averaged figure even though your earnings have not fallen. If you have moved and have not yet been paid a bonus in the new role at all, the mainstream options narrow sharply, but a private bank may still engage where your contract commits to bonuses, because that route weighs trajectory and contractual commitments rather than working purely from what has already been banked.
How are a cash bonus and a deferred award treated differently?
For senior bankers, the bonus is rarely paid as a single cash sum. Above a certain level, regulatory remuneration rules require a large part of the bonus to be deferred, often as shares or fund units vesting over three to five years. To a lender, those are two different kinds of income, and the distinction matters as much as any percentage.
The cash element of the bonus is what mainstream lenders assess. The deferred portion, paid in stock that has not yet vested, is generally treated the same way restricted stock units (RSUs) are treated, which among the mainstream lenders on our panel means it is mostly excluded. Only a small number of lenders engage with vesting equity at all, and several state plainly that share awards are not counted as variable income. A bonus that diverts into pension or a share scheme rather than cash sits in the same difficult category: a number of lenders count only the cash that actually reaches your account.
This is the structural reason a banking bonus and a hedge fund bonus, even at the same headline number, can produce different borrowing. The more of your award that is locked into deferred stock, the smaller the slice a mainstream lender will build your mortgage on. Where the deferred portion is large and central to the case, the realistic routes are either a lender that engages with vesting equity or a private bank that can underwrite the whole compensation picture. Our guide to equity compensation mortgages covers how vesting awards are treated in detail.
A worked comparison: one banker across four methodologies
The clearest way to see the spread is to hold the income fixed and change only the lender. Take a vice president (VP) at a bulge-bracket bank with a £165,000 base salary, a £220,000 cash bonus this year (down from £260,000 the year before), buying at 75% loan-to-value (LTV). The two-year cash-bonus average is £240,000, but because the latest year is lower, the cautious lenders work from the lower figure. Here is how that single income profile produces four very different borrowing outcomes, driven only by which lender's methodology applies.
Please note: These figures are for illustrative purposes only. The actual amount you can borrow will depend upon your personal circumstances, credit profile, LTV, the lender's individual criteria and full affordability assessment.
Two things move that banker from the bottom bar to the top. The first is the percentage: a lender that counts the bonus in full, rather than half, roughly doubles the bonus contribution to income. The second is the multiple: the generous tiers sit at higher income thresholds and lower LTVs. Neither happens automatically. The 100% figures rest on the bonus being evidenced as sustained, or on a premier banking relationship that opens the top multiple on our panel. The work is in presenting the case to the lender whose settings the bonus can actually satisfy. We have applied this kind of analysis in cases like this £990k mortgage for an investment banking director using multi-year bonus history.
The cautious camp
Discounts hardest
Counts a lower proportion of the bonus, leans on a two-year average or the lower year, and may cap the bonus against base salary. This is the default treatment for a standard discretionary award without a long track record. It produces the conservative figures, and for a borrower not stretching against the ceiling it can still be the right home for other reasons.
The recognising camp
Recognises most
Counts a higher proportion of the bonus, can use the latest year where it helps, rewards a multi-year track record, and applies no formulaic cap. Reaching this camp usually depends on the strength of the evidence behind your bonus. Where the case supports it, it can lift assessed income substantially.
Which lenders use 100% of bonus income?
On our panel, more lenders than the cautious reputation of bonus income suggests. Full treatment may appear at some mainstream banks, several building societies, a small number of specialist lenders, and the large-loan and bespoke ranges that sit inside bigger names. The 100% tends to come with a condition in each case. It applies to a particular kind of bonus, a particular track record, or a particular loan size, and the same lender may count half of a bonus that misses the gate. That is why this page does not carry a list of names: lender criteria change often enough that a named policy read three months from now may be wrong. What holds still is the structure, four routes to full treatment, each with its own evidence requirement.
Several lenders may operate more than one gate. A lender may count 100% of a monthly bonus on three payslips, 100% of a guaranteed annual bonus on a contract, and only 50% of an annual discretionary bonus however long the record. Read as a single policy, that lender "uses 100% of bonus". Read against your own payslips, it may not. For the classic City bonus paid once each spring, gates three and four are the ones that matter.
Gate one
Frequency
Bonus paid monthly or quarterly. Several lenders may count 100% of it on three consecutive monthly payslips, or four quarterly ones, while capping an annual bonus at 50% to 70%. The year-to-date figure on the latest payslip has to support the run rate.
You, if your bonus lands monthly or quarterly.
Gate two
Contractual guarantee
A bonus written into the employment contract as an entitlement with no conditions. Some lenders may count 100% of a guaranteed annual bonus where they count 50% of a discretionary one, and may still want two years of payslips showing it paid.
You, if the bonus is an entitlement in your contract.
Gate three
Track record
An annual discretionary bonus with a multi-year history. A smaller group of lenders may count 100% once two years of payslips or P60s support it; some want three years before moving above 50%. The figure counted is usually the two-year average, or the latest year if lower.
You, if you have two or more years of annual bonus to show.
Gate four
Loan size and income tier
Large-loan teams and bespoke ranges inside mainstream lenders, and some building societies' enhanced ranges. These may count 100% of a less-frequent bonus where gross income including bonus clears a threshold, often around £100,000, with two years' P60s behind it.
You, if the loan or your income reaches a large-loan range.
Criteria correct as of October 2026. Mortgage lending policies change regularly, for the latest advice, speak to us directly.
There is a second question hiding inside the first: 100% of what? Lenders that count the full bonus still differ on which figure they take: the latest year, the average of the last two, or the lower of those two. And many tend to count only the cash element, so the deferred share sits outside the 100% however generous the headline. Above certain loan sizes the picture can change again, because the case may leave the automated affordability model and reach a large-loan team or a bespoke range, where the enhanced treatment described in the fourth gate applies. Private banks tend to underwrite the whole picture rather than apply a percentage at all, and that route may come at a cost in rate and fees that is worth paying in some cases and not in others. Reaching for a specialist lender or a private bank because they "use 100%" can be a way of paying more than the case needs.
The point most people searching for "100% bonus lenders" miss is that the share of bonus counted and the income multiple applied are two separate settings, and a lender that is generous on one can be ordinary on the other. Take the VP from the worked example. At 100% of the VP's latest-year cash bonus on a 4.49× multiple: £165,000 + £220,000 = £385,000; × 4.49 = £1,728,650, around £1.73m. At 60% of the two-year average on a 5.5× tier: £165,000 + (60% × £240,000) = £309,000; × 5.5 = £1,699,500, around £1.70m. The "60% lender" lands within about £30,000 of the "100% lender", and if it also prices better it may be the right answer. For senior bankers, mainstream lenders may work between roughly 4.5 and 5.5 times assessed income, with some potentially reaching up to 6 times for higher income bands at lower LTVs, and premier banking ranges potentially extending further for qualifying account holders. Some lenders measure the minimum income for their higher multiple on basic salary alone, so a bonus that lifts assessed income may still leave you on the standard multiple if base pay sits below the threshold. Lender selection means solving both settings at once.
Please note: These figures are for illustrative purposes only. The actual amount you can borrow will depend upon your personal circumstances, credit profile, LTV, the lender's individual criteria and full affordability assessment.
What changes when your bonus is paid in US dollars?
If your bonus lands in US dollars (USD), as it does for many bankers at American firms, the panel reshuffles again. A lender's foreign-currency policy now sits on top of its bonus policy, and the two together decide the outcome. Some lenders apply a haircut to non-sterling income, commonly in the region of 20% to 30%, before they even reach the bonus percentage. A smaller group apply a lighter haircut to bonus specifically, and a few accept a range of major currencies with no haircut at all.
The result is that the lender ranking for a USD-paid banker can look nothing like the ranking for a sterling-paid one. A lender that treats sterling bonus generously may apply a heavy currency haircut that pulls it back down the list; a lender that is middling on bonus but accepts USD without a haircut may end up well ahead. For a banker whose base and bonus are both in dollars, the currency policy is often the larger lever of the two. Our guide to foreign currency income mortgages covers the haircut question in full.
How do you read which lender fits your bonus?
Reading the panel comes down to matching the shape of your bonus to a lender's four settings, then checking the evidence will carry it. A large, stable, multi-year discretionary bonus points toward the lenders that recognise sustained variable income at a higher percentage. A recent job move points toward the lenders that will bridge to your previous employer rather than averaging against zero. A dollar-denominated bonus points toward the lenders with light currency haircuts. A bonus weighted heavily toward deferred stock points toward the handful of lenders that engage with vesting equity, or toward a private bank. A bonus paid monthly or quarterly, or written into a contract, points toward the lenders whose 100% gate it already passes.
None of that removes the value of advice, and it is not a calculation you have to run alone. What the assessment will ultimately rest on is the evidence: the right percentage is only unlocked when the lender can see the bonus clearly documented. Our article on proof of bonus income sets out the evidence pack lenders want to see. When you are ready to look at a realistic figure for your own profile, that is the point at which the panel stops being abstract, and a specialist broker who places banking cases regularly can tell you which lenders' settings your bonus actually satisfies. That first conversation is fee-free and carries no obligation.
Part of a wider guide
This article sits within our broader guide to bonus income mortgages, covering how annual, quarterly, discretionary, and guaranteed bonuses are assessed, evidenced, and used toward affordability across the lender panel.
Read the full bonus income guide →FAQs
Each lender combines four settings: the percentage of the bonus it counts (50% to 100%) and what evidence lifts it, how it averages the bonus, how it treats a recent change of employer, and whether it caps the bonus against base salary. Those four settings vary across the panel, which is why the same bonus can support very different borrowing. The income multiple is then applied to whatever income survives that process.
Because the income is not the variable, the methodology is. One lender may count half your bonus and cap it against base, while another may count it in full with no cap, and the two can sit hundreds of thousands of pounds apart on an identical P60. Lender choice, not earning power, is usually what moves the number.
Many lenders want two years for an annual discretionary bonus, evidenced on payslips or P60s, and some may want three before moving above 50%. A smaller number may consider a single year where the bonus was paid by the current employer within the last twelve months. A longer, steadier record tends to unlock the higher percentages.
Some mainstream banks, several building societies, a few specialist lenders and the large-loan or bespoke ranges inside bigger lenders on our panel may count 100% of bonus. Each may attach a condition: the bonus is paid monthly or quarterly, is contractually guaranteed, has a two-to-three-year record, or sits within a large-loan range with a minimum income. Criteria change often, so we check which lenders operate each gate against your figures rather than publish a list.
Not always. The share of bonus counted and the income multiple are separate settings: a lender counting 100% of the latest year at 4.49 times can land within a few percent of one counting 60% of a two-year average at 5.5 times on the same payslips. On our panel, fewer lenders pair full treatment with a higher multiple than offer either on its own.
Usually not by mainstream lenders. The deferred portion paid in vesting shares is generally treated like restricted stock units (RSUs), which many mainstream lenders largely exclude. The cash element is what mainstream lenders assess; where deferred stock is central to the case, a lender that engages with vesting equity or a private bank route may be needed.
It can change which lenders work for you. Many want to see at least one bonus actually paid by your current employer before they rely on the figure, and a sign-on guarantee does not stand in for that. Once you have that first bonus, some lenders may combine it with the bonus from your previous employer in the same field to build a two-year picture, while others count only the current employer and treat the missing year as zero, which can roughly halve the average.
The lender's foreign-currency policy sits on top of its bonus policy. Some lenders apply a haircut to non-sterling income, often around 20% to 30%, before reaching the bonus percentage, while a few accept major currencies with no haircut. For a dollar-paid banker, the currency policy can move the lender ranking more than the bonus policy does.
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