Mortgages for Investment Banking Associates and VPs: A Practical Guide
Your base salary is the easy part. What decides the borrowing figure at this stage of your career is how much bonus history you can show, how each lender reads it, and whether a recent move or a sign-on payment gets in the way.
In short
As an associate or vice president (VP) in investment banking you are employed on PAYE, so lenders may take your base salary in full and assess you much like any other employee. The variable is the bonus. At your stage the bonus history is short, often one or two years at the current bank, and lenders differ on how many years they want, what percentage they count and whether they average it. A sign-on bonus is not treated as income by lenders on our panel, and a guaranteed bonus only counts once it has actually been paid. Put the same associate in front of two lenders and the borrowing figure can sit six figures apart. This guide covers what counts, what does not, what moving banks does to the picture, and what you may be able to borrow.
Who this is for
You are an associate or VP at a bulge-bracket, elite boutique or smaller advisory bank in London, employed on PAYE with a base salary and a discretionary annual bonus, and you are buying your first home, moving up from a flat, or remortgaging. You may have moved banks in the last year or two, possibly with a sign-on or guaranteed bonus attached. This article is about your stage of the career ladder specifically. The cross-lender detail on bonus methodology lives in our companion piece on how investment banking bonuses are assessed across different lenders, and the full career picture sits in our investment banking mortgage guide.
You earn well. You'll probably be fine. But...
For most associates and VPs that holds. You are on PAYE, you have payslips and a P60, and your base salary alone may well support a decent mortgage at most lenders. In our experience the majority of cases at this level complete with a mainstream lender at mainstream pricing.
The "but" is that your pay does not look like most employees' pay, and the part of it that makes the difference arrives once a year. An associate three years into a bank might have a base of £130,000 and a bonus history that is two entries long. A VP who moved banks last spring might have a large package on paper and not a single bonus paid by the new employer yet. Lenders build their affordability models around steady, salary-led income, so when the bonus is a large share of the total and the history is short, each lender has to make a judgement about how much of it to rely on. They make that judgement differently, and at a five times multiple a difference of £40,000 in assessed income is £200,000 of borrowing.
That is the part worth understanding before you start viewing. This article sits within our wider guide to mortgages for investment banking professionals, which covers every level from analyst to managing director. Here the focus is the associate and VP years, when the income is strong, the track record is short, and the first big purchase is usually on the table.
Director and Mortgage Adviser
Specialist mortgage broker for City professionals. David advises investment banking analysts, associates and VPs on first purchases, moves and remortgages built around bonus-led pay, recent bank moves and dollar-denominated income.
What lenders may see on an associate's or VP's payslip
Lenders may split your pay into three things: base salary, cash bonus and anything deferred. Base salary counts in full across the panel. The cash bonus is assessed, at a percentage that varies from lender to lender. The deferred portion, paid in shares or fund units that vest over several years, is generally treated like any other share award, which on the mainstream panel means it is mostly left out.
At associate level this is usually simple, because the bonus is mostly or entirely cash. From VP onwards a rising share of the award is deferred under the bank's remuneration rules, and that deferred slice adds little or nothing to what a mainstream lender may count, however contractual it is. If deferred pay is already a meaningful part of your package, our guide to equity compensation mortgages covers how vesting awards are treated in detail.
One more thing lenders may look at is the ratio of bonus to base. Some lenders may cap the bonus they use at a percentage of your salary. For most associates that cap does not bite. For a VP whose bonus is larger than base, it can, and that alone can move a lender from the top of the list to the bottom for your case.
How much bonus history do lenders want at your stage?
Most mainstream lenders may want two years of bonus history before they rely on it, but that is not a wall. Some lenders may accept a single year with an employer letter confirming the award, and a small number may use only the most recent year where the trajectory is clearly upward, which suits an associate whose bonus has just stepped up.
The reason this matters more for you than for a managing director is arithmetic. If a lender averages two years and your first year as an associate was a partial one, or a much smaller analyst-level award, the average understates where you are now. If a lender counts only what your current employer has paid and you have been there eighteen months, the second year of the average may be filled with zero, which can roughly halve the figure even though your earnings have not fallen.
So at this stage the question is rarely "will they take my bonus" and usually "how many years, at what percentage, and averaged how". Those three settings, combined with the income multiple, are what produce the spread in the example below. Payslips showing the bonus month, P60s for the years concerned and the award letters are the evidence lenders may ask for; our article on proof of bonus income lists the full pack.
Take an associate in her third year at the same bank, on a £130,000 base salary, with a cash bonus of £80,000 in the latest year and £55,000 the year before, buying at 80% loan-to-value (LTV). The two-year average is £67,500. Here is how that one profile may produce four different borrowing figures, depending only on the bonus methodology and the loan-to-income (LTI) multiple the lender 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 a full affordability assessment.
Two things move that associate from the bottom bar to the top. The first is the percentage of bonus the lender counts, which depends on the evidence that it recurs. The second is the multiple, and the higher tiers sit behind income and LTV gates rather than being available to everyone. Neither is automatic, and the gap between the bars can be as much as six figures on identical payslips, which is why we choose the lender before the application goes in.
Do sign-on bonuses and guaranteed bonuses count?
A sign-on bonus does not count as income for a mortgage. It is a one-off payment for joining, so lenders on our panel do not treat it as something that recurs, and it contributes nothing to affordability however large it is. What it can do is sit in your deposit, provided it has landed in your account and the paper trail from award letter to bank statement is clean.
Guaranteed bonuses are the other question associates and VPs ask, and the answer is narrower than people expect. In banking a genuine guarantee usually arises from a move: a first-year or second-year amount written into the offer to make the switch worthwhile. Mainstream lenders may accept a guaranteed bonus for affordability only once it has actually been paid. A promise in the contract, on its own, is not income a mainstream lender may lend against. Once the guaranteed amount has been paid through the normal bonus round it is assessed like any other bonus, and once it rolls into discretionary awards the standard averaging applies.
So a sign-on payment helps your deposit, a guarantee helps you reach your first bonus at the new bank sooner, and neither raises the percentage of bonus a lender counts. The practical consequence for a recent joiner is that the first application often rests on base salary alone, and the next section covers what that means in practice.
What happens if you have just moved banks?
Moving banks need not stop you getting a mortgage, but it changes which lenders work for you and what income they may count. Most lenders may want to see at least one bonus actually paid by your current employer before they rely on the figure. Until then, the mainstream options tend to rest on base salary, and the question becomes whether base alone reaches the number you need.
Probation is a separate question and usually a smaller one. Several lenders may work from a signed employment contract rather than waiting for the first payslip, and being inside a probation period is not automatically a barrier; some lenders may lend inside it. What matters is the specific lender's policy on new employment and how the case is presented, so it is a matter of matching the case to the lender.
Once your first bonus at the new bank has been paid, lenders split. Some may combine it with the bonus you earned in the same line of work at your previous bank to build a two-year picture. Others may count only what the current employer has paid, filling the missing year with zero. On the same person that difference can be worth a six-figure sum of borrowing, so if a move is on the cards and a purchase is too, the order you do them in is worth a conversation. If you are between banks with no bonus paid at the new one, and base salary does not get you there, a private bank may consider the case on the strength of the contract and your track record, at a cost that needs weighing against waiting one bonus round.
How much can an associate or VP borrow?
Mainstream lenders may lend between roughly 4.49 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 a little further for qualifying account holders. At associate and VP pay, the income gate for the higher tiers is usually cleared; the LTV gate and the loan size are what decide whether the tier applies.
Two mechanics matter more at your stage than at a director's. The first is that the multiple is applied to assessed income, not headline income, so a 6 times tier on a lender that counts half your bonus may produce a smaller loan than a 5 times tier on a lender that counts all of it. Get the assessment right first, then chase the multiple. The second is that the higher tiers usually sit at 85% LTV or below, and some lenders step the maximum LTV down as the loan size rises, so a purchase above roughly £1m at a small deposit can fall outside the enhanced tier even where the income would qualify.
The multiple is a ceiling. The affordability calculation then looks at net monthly income against your outgoings, credit commitments and a stress-tested payment. For a typical associate with clean credit and a student loan the two tests land close together; a large car finance agreement or a second property can pull the affordability figure well below the multiple. We run both before recommending a lender so the figure you work to is the real one. The line-by-line arithmetic of how one lender turns salary and bonus into a borrowing figure is in our companion piece on how investment banking bonuses are actually calculated.
Deposit and LTV: the levers you control
At associate and VP level the deposit is often the lever with the most give in it, because a bonus round or two can change it materially. Lenders generally price and gate by LTV band, so an extra few thousand pounds of deposit that takes you from 90% to 85% LTV can do more than reduce the rate: at some lenders it may move you into a higher income multiple, which changes the budget itself. We model that before you fix a number in your head, not after an offer is accepted.
Three things about deposits are specific to this audience. First, bonus cash you are counting on for the deposit needs to have been paid, with the award letter and the statement showing it arrive; a bonus due next month is not a deposit yet. Second, a bonus cannot do two jobs at once: if the lender is using it in the affordability assessment, some lenders may adjust for the portion you are spending on the deposit, so we tell the lender which is which up front. Third, a family gift may be acceptable at most lenders with a signed gift letter, and it is common at first-purchase stage even for well-paid buyers.
At the top of the LTV range, lending at 90% on a bonus-led income is possible at some lenders, but the pool narrows sharply as loan size rises, and bonus treatment tends to tighten at the same time. Where the deposit is deliberately being kept small, as in the case below, the lender is chosen for its combination of LTV appetite and bonus policy rather than for either on its own.
What changes when you make VP, and what changes after that
Promotion to VP usually brings three changes a lender may notice: a larger bonus relative to base, a larger deferred slice, and a bigger purchase. Each moves the case toward a smaller group of lenders. The bonus-to-base caps described earlier start to bite once the bonus is a similar size to salary. The deferred portion grows and adds little to the mainstream assessment. And the loan size starts to reach the bands where LTV ceilings step down and large-loan teams take over from standard underwriting; our guide to large mortgage loans covers that ground.
If any of your pay arrives in US dollars, which is common at American banks, a second policy sits on top of the bonus policy. Some lenders may apply a haircut to non-sterling income of around 20% to 30% before the bonus percentage is even reached, while a few may accept major currencies with a lighter haircut or none. A dollar-paid VP's lender ranking can look nothing like a sterling-paid colleague's, and the foreign currency income guide sets out the mechanics.
None of this makes a VP purchase harder than an associate one. It makes it more sensitive to lender choice, which is a different thing. The VP in the case below had both a visa and a dollar bonus to deal with, and completed at 75% LTV with a lender whose criteria could use both.
How we approach an associate or VP case
In our experience the borrowing figure is settled before the application is submitted, by lender choice and by how the income is presented, so that is where the work goes. On the first call we take your base, your bonus history by year and employer, any move or sign-on in the last two years, your deposit and its source, and your commitments, and give you an indicative range the same day.
We then use only the income the case needs. If base salary reaches the number, the bonus stays in reserve and the application is simpler and quicker. If the bonus is needed, we match its shape (how many years, which employer, cash or deferred, sterling or dollars) to the lenders whose settings suit it, and we run a Decision in Principle (DIP) early, even if you are months from viewing, because a blip on a credit file is easier to fix with time in hand. Everything the lender may ask for is collected up front: three months' payslips including the bonus month, P60s, award letters, bank statements and the deposit trail. A clean file from the first review is what keeps a case moving while the property is still available.
If you want to know where your own numbers land, a fee-free consultation is the quickest way to find out.
Part of a wider guide
This article sits within our broader Investment Banking mortgage guide, covering analysts, associates, VPs, directors and managing directors, and the full picture of how lenders treat bonus-led, deferred and dollar-denominated pay.
Read the full Investment Banking guide →Frequently asked questions
Often, yes. Most mainstream lenders may want two years, but some may accept a single year with an employer letter confirming the award, and others may use the latest year alone where the pattern is upward. Where the bonus cannot yet be used, the application can usually be built on base salary, which at associate level supports a meaningful loan on its own.
No. A sign-on bonus is a one-off payment, so lenders on our panel do not treat it as recurring income and it adds nothing to affordability. Once it has been paid into your account it can form part of your deposit, with the award letter and bank statement as evidence.
Only once it has actually been paid. A guarantee written into your contract but not yet received is not income a mainstream lender may lend against, and once paid it is assessed like any other bonus. A guarantee helps you reach your first bonus at a new bank sooner; it does not raise the percentage a lender counts.
Yes. Several lenders may work from your signed employment contract, and probation is not automatically a barrier at some lenders. Until your first bonus at the new bank has been paid, most lenders may count base salary only, so the question is whether base reaches the figure you need.
Mainstream lenders may lend between roughly 4.49 and 5.5 times assessed income, with some potentially reaching up to 6 times at higher income bands and LTVs at or below 85%. Assessed income is base plus the percentage of bonus that particular lender counts, so the bonus methodology usually matters more than the headline multiple.
Usually not by mainstream lenders. The deferred portion paid in vesting shares or fund units is generally treated like a share award and largely excluded, so at VP level and above the cash element is what is assessed. Where deferred pay is central to the case, a lender that engages with vesting awards or a private bank route may be needed.
Not entirely. If a lender is counting the bonus as income, some may adjust for the portion being spent on the deposit, so it is worth being clear with the lender about which bonus is doing which job. A bonus that has already been paid and sits in your account is the simplest deposit evidence.
It can change the ranking completely. Some lenders may apply a haircut of around 20% to 30% to non-sterling income before reaching their bonus percentage, while a few may accept major currencies with a lighter haircut or none. For a dollar-paid banker the currency policy is often the larger lever, so the lender is chosen for both policies together.
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