E Q U I T Y C O M P E N S A T I O N
Equity compensation mortgage: how lenders assess RSUs, stock options, deferred stock, and other equity awards
Your equity compensation may represent a significant proportion of your total pay — but most mortgage lenders don't treat it as income. How it's classified, evidenced, and presented often matters more than its value.
Y O U R T E A MYou'll speak with a broker who structures equity compensation applications every week.
David Walsh
Director & Mortgage Broker
Founder of Kite Mortgages. Specialist in complex income structures for City professionals. Advises on mortgage strategy for high earners with partnership income, bonus-heavy pay, equity compensation, and foreign currency earnings.
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Simon Hart
Mortgage & Protection Adviser
Mortgage adviser at Kite Mortgages. Specialises in high-value purchases and remortgages for City professionals. Works with clients navigating complex income structures including variable pay, carried interest, and multi-currency earnings.
View profile →I N C O M E A S S E S S M E N TWhat Counts as Equity Compensation for Mortgage Purposes
Equity compensation is any part of your remuneration that is paid in, or linked to, shares, fund units, or other non-cash instruments. It spans a wide range of structures — from RSUs at a tech firm to co-investment stakes at a PE fund — and the mortgage implications vary enormously.
The common thread is this: lenders care about whether income is predictable, evidenced, and liquid. The label matters less than the pattern. A VP at Google with four years of quarterly RSU vesting and consistent sell-to-cover is presenting a very different picture from a PE principal with unrealised co-invest tied up in a fund that hasn't yet exited.
Here's a brief taxonomy of the types we see most often, and how lenders tend to approach them:
Each of these is explained in detail below, with how lenders treat them and what documentation you'll need.
RSUs (Restricted Stock Units) — The Most Common Form
RSUs are the equity type we see most frequently. They're standard at large tech firms — Amazon, Google, Meta, Apple, Microsoft — and increasingly common at fintechs, scale-ups, and US-headquartered financial services firms operating in the UK.
An RSU is a promise of shares that vest on a defined schedule, usually subject to continued employment. Once vested, the shares are yours — you can hold them or sell them. Most professionals sell immediately through a sell-to-cover arrangement, where enough shares are sold to cover the tax liability and the net proceeds are paid in cash.
From a mortgage lender's perspective, the critical distinction is between vested and unvested RSUs:
Vested RSUs — shares that have already been released to you — are the only component most lenders will consider. If you've been selling regularly and the proceeds appear on your bank statements and payslips, this creates an evidenceable income stream.
Unvested RSUs — shares that are scheduled to vest in the future — are almost universally excluded. They're contingent on continued employment, and many lenders view them the same way they'd view a future bonus that hasn't been confirmed.
How Different Lenders Approach RSUs
Approaches vary far more than most borrowers expect:
That's a difference of over £315k in borrowing capacity from the same person with the same income. The lender, not the income, is the variable.
What Lenders Actually Look For
Lenders who do accept RSU income focus on four things:
Vesting history
A consistent track record of RSUs vesting over 12 to 24 months. Quarterly vesting creates a cleaner pattern than annual — more data points, less volatility between periods.
Predictability
Regular vesting on a defined schedule, from a stable employer. A VP at a FTSE 100 company with four years of predictable annual grants is a different proposition from a startup employee with a single cliff-vesting grant.
Liquidity
Evidence that you actually convert vested RSUs to cash. Lenders want to see the money arriving in your bank account, not sitting as unsold shares in a brokerage account. If you hold rather than sell, the income is harder to evidence — even if the shares are worth more.
Employment context
RSUs linked to large, listed employers are treated more favourably than equity in earlier-stage businesses. A grant from Google or Goldman Sachs carries different underwriter confidence than one from a Series B startup.
USD-Denominated RSUs and Currency Haircuts
If your employer stock is listed in USD — which covers most US tech firms — lenders will convert the proceeds to GBP and apply a haircut, typically 10% to 25%, to account for exchange rate risk.
On a £100k RSU vesting, the difference between a 10% and 25% haircut is £15k of assessed income — which translates to £75k+ of borrowing power at a 5x multiple. Currency haircuts compound with the existing conservatism around RSU inclusion, so lender selection matters even more for USD-denominated equity.
Stock Options
Stock options give you the right to buy shares at a fixed price (the exercise or strike price) at some point in the future. If the current share price exceeds the strike price, the options are said to be "in the money" — and the difference represents potential value.
For mortgage purposes, the key distinction is between exercised and unexercised options:
Exercised and sold options — where you've bought the shares and immediately sold them — produce a cash amount that shows on your bank statements and P60. This is treated the same as any other income, and lenders will usually include it if there's a pattern.
Unexercised options — even if they're deeply in the money — are almost universally excluded from mainstream affordability. They're speculative from a lender's perspective: the share price could move, the exercise window could expire, and the income isn't guaranteed until the transaction happens.
A small number of private banks will consider deep-in-the-money options on a defined exercise schedule, particularly where the employer is a well-known listed company and there's a clear intention and timeline for exercise. But this is bespoke underwriting, not standard policy.
Practical advice for option holders
If you're planning a purchase and hold exercisable options, the strongest approach is to exercise and sell before applying. This converts speculative value into evidenced income and removes the uncertainty that causes lenders to exclude it. Time the exercise so the proceeds appear on your bank statements and P60 before the mortgage application goes in.
If exercising isn't practical — because the options aren't yet exercisable, or you'd prefer to hold — we can still structure a mortgage around your other income components (salary, bonus, and any vested RSU income). The options won't contribute to borrowing capacity, but they may support the case for a more flexible lender who considers overall financial strength.
Deferred Stock Awards and Restricted Shares
Deferred stock is a standard feature of compensation at investment banks from VP level onwards. A portion of your annual bonus — typically 30% to 50% — is paid not in cash but in restricted stock, fund units, or deferred cash that vests over two to three years.
The challenge is that this income is contractually owed to you, and you can reasonably expect to receive it — but it doesn't exist in the eyes of most mainstream lenders until it's vested, released, and paid. Unvested deferred awards sitting in a restricted stock account are typically excluded from affordability, regardless of how predictable the vesting schedule is.
How Lenders Treat Deferred Stock
Vested tranches — stock or cash that has already been released and received — can be included by some lenders as part of your bonus income. The key is that it appears on your payslips, bank statements, and P60. Some lenders don't distinguish between cash bonus and vested deferred stock when looking at total variable pay — they see the P60 figure and work from that.
Unvested tranches are harder. Most mainstream lenders exclude them outright. A small number of private banks and specialist teams will take a view if the vesting schedule is clear, the firm is well-known, and you have a multi-year track record of deferred awards vesting consistently.
Where this becomes practically important is when your P60 shows both your current year's bonus and vested deferred awards from a prior year. The combined figure may be higher than your typical annual bonus — or it may create apparent volatility that confuses underwriters. Knowing which lenders will pick this apart and which take the P60 at face value matters.
Structuring Applications with Deferred Stock
We separate income into components: base salary, cash bonus, vested deferred comp, and unvested deferred comp. We then match each component to the lender most likely to accept it. In some cases, the best outcome is a mainstream lender for the core income — salary and cash bonus — with the vested deferred element presented as additional evidence of sustainable earnings rather than a separate income line.
Co-Investment and Fund Equity
Co-investment is a feature of compensation at private equity firms from Principal level upwards. You invest personal capital alongside the fund — committing cash to the fund's investments in exchange for a share of the returns.
From a mortgage perspective, co-invest creates two problems. First, the capital you've committed is locked into the fund until exit — it's illiquid and can't be counted as savings or deposit. Second, returns from co-investment are treated the same way as carried interest: excluded from affordability unless and until they've been received as cash.
The practical effect is that PE professionals often have less available cash than their income would suggest. A significant proportion of wealth is tied up in illiquid fund interests. This constrains deposit levels and creates a mismatch between net worth and borrowing capacity.
How We Structure Around Co-Investment
We factor co-invest commitments into the overall planning. If cash is constrained because of upcoming fund calls, we may recommend a higher LTV than you might otherwise choose — preserving liquidity for the commitment while securing the mortgage on assessed income alone. We may also suggest product structures that allow capital repayments without penalty once co-invest returns eventually crystallise.
For very large purchases where mainstream lending on salary and bonus alone falls short, a private bank can take a broader view of total wealth — including co-invest holdings and overall net worth — as part of a bespoke affordability assessment.
Carried Interest
Carried interest — a share of a fund's profits paid to PE and hedge fund professionals — sits at the boundary between equity compensation and performance-linked income. It's included here because it's often part of the same total compensation package as deferred stock, co-invest returns, and RSUs.
The full picture on carried interest and mortgages is covered in detail on the PE and hedge fund pillar pages. For the purposes of this guide, here's what matters:
Most mainstream lenders exclude carried interest from affordability entirely. The timing depends on fund exits, the amounts are contingent on performance, and carry that has been allocated but not yet paid is speculative from an underwriter's perspective.
Crystallised carry — carry that has been paid and received as cash — can sometimes be considered by lenders willing to exercise judgement on non-standard income. A multi-year track record of carry distributions, showing a consistent pattern, strengthens the case.
Private banks are the most likely route where carry represents a significant proportion of total wealth. They'll assess it holistically alongside salary, bonus, co-investment returns, and overall net worth.
April 2026 Tax Changes
From 6 April 2026, carried interest moves from capital gains tax to a new regime that treats qualifying carry as trading income at an effective rate of approximately 34.1%. For mortgage purposes, the reclassification as trading income may eventually make it easier to present to certain lenders — but it's too early to say how quickly affordability models will adapt. The more immediate effect is on cash flow: carry will fall within the payments-on-account regime, potentially bringing forward tax liabilities.
LTIPs and Share Incentive Plans
Long-term incentive plans and share incentive plans are employer share schemes with holding or vesting periods. They're less common than RSUs or deferred stock, but they appear in certain sectors — particularly FTSE-listed companies, consultancies, and some financial services firms.
LTIPs
LTIP awards are typically performance-conditioned: shares or cash vest after three to five years if the company meets defined targets (earnings per share, total shareholder return, etc.). Vesting is binary — you either receive the award or you don't.
From a lender's perspective, unvested LTIPs are excluded from affordability. The performance conditions introduce uncertainty that underwriters aren't equipped to assess. Matured LTIP awards — where the shares have vested and been released — can be treated as income if there's a pattern of receipt, but most mainstream lenders will still apply a conservative view.
Share Incentive Plans (SIPs)
SIPs allow employees to buy shares out of pre-tax salary and receive matching shares from their employer. After a holding period (usually three to five years), the shares can be withdrawn tax-free.
Lenders typically treat SIP income similarly to savings rather than earned income. The value of matured SIP holdings can support your overall financial picture, particularly with private banks, but they're unlikely to add to assessed affordability through mainstream channels.
For both LTIPs and SIPs, the practical approach is the same as with other equity types: focus on what's matured and evidenced, present it cleanly, and select a lender whose policy accommodates it.
How to Present Equity Income to Lenders
The way equity compensation is packaged matters as much as the income itself. Underwriters assess what they can see and verify — not what you know to be true about your compensation.
Separate your income into components
Don't present equity compensation as a single lump. Break it into distinct streams: base salary, cash bonus, vested equity (by type), and unvested or illiquid holdings. This allows us to match each component to the lender most likely to accept it — and prevents an underwriter from discounting your entire variable income because one component doesn't meet policy.
Evidence each stream independently
Every form of equity income needs its own evidence trail. RSUs need vesting schedules, brokerage statements, and bank credits. Deferred stock needs award letters and statements showing vested tranches. Exercised options need exercise confirmations and sale proceeds. The cleaner and more self-contained each evidence pack, the easier it is for an underwriter to assess.
Show the pattern of receipt and liquidation
Lenders assess sustainability, not point-in-time value. A single large RSU vesting is less persuasive than twelve months of quarterly vesting at a consistent level. If you've been selling regularly, show the pattern. If you've recently changed your approach — started selling when you previously held — explain why and provide the context.
Time your application around vesting events
If a significant vesting event is approaching — within weeks rather than months — it may be worth waiting. Having the vested amount appear on your bank statements and latest payslip before the application goes in converts future income into evidenced income, which materially changes how lenders treat it.
Work with a broker who knows the landscape
The difference between lenders on equity compensation is wider than for almost any other income type. Some exclude it entirely. Others include it generously. The policies change frequently and the published criteria often don't capture the full picture — underwriter discretion, team-level appetite, and case packaging all influence the outcome. A broker who submits equity compensation cases regularly knows where the real flexibility sits.
D O C U M E N T R E Q U I R E M E N T SDocuments You'll Need for an Equity Compensation Mortgage
The documentation required depends on the type of equity, but here's what to have ready:
For RSUs
Vesting schedule
Full schedule showing grant dates, vesting dates, and number of units per tranche
Award grant letters
From your employer or stock plan administrator, confirming each grant
Brokerage statements
Showing shares vested, shares sold, and net cash proceeds — covering the last 12–24 months
Bank statements (3–6 months)
Showing RSU sale proceeds credited to your account
P60 and payslips
Including payslips that show equity income alongside base and bonus
For Stock Options
Option grant documentation
Strike price, number of options, vesting schedule, and exercise window
Exercise confirmations
If exercised — showing the shares acquired, the sale price, and net proceeds
Bank statements
Showing exercise and sale proceeds received
For Deferred Stock
Annual compensation statement
From your employer, showing total variable pay split between cash bonus and deferred elements
Deferred award letter
Confirming the amount, vesting schedule, and any performance conditions
Statements showing vested tranches
Evidence that prior deferred awards have vested and been received
P60 and payslips
Lenders will often take the P60 total — make sure the numbers reconcile
For All Equity Types
Employer letter
Confirming the compensation structure, expected continuation, and any changes
For USD-denominated equity
Original statements in the source currency plus the GBP conversion trail
Summary note
A clear one-page overview of your compensation structure — we help prepare this as part of the application
Timing Tips
Apply after vesting events have landed
Underwriters can only assess what’s evidenced — if your next vest is in three weeks, it may be worth waiting
Sell before you apply (if you plan to)
Cash in your bank account is stronger evidence than shares in a brokerage account
Line up brokerage access early
Statements from US stock plan platforms (E*Trade, Schwab, Fidelity) can take time to generate in the format lenders need
W H O T H I S A P P L I E S T OWhich Professionals Receive Equity Compensation?
Equity compensation appears across several of the professions we work with, though the type and complexity varies. Start with the guide below that matches your role — then come back here for the detail on how lenders assess the equity element.
Tech & Product Leaders
RSUs, stock options, ESPP, startup equity. Equity often represents 40–60% of total compensation at VP level and above. Lender selection is critical.
View guide →
Investment Banking Professionals
Deferred stock, restricted shares, and co-investment returns from VP level. Vested tranches may count; unvested elements are typically excluded.
View guide →
Private Equity Professionals
Co-invest equity, carried interest, and fund stakes. Most require private bank or bespoke underwriting to capture the full income picture.
View guide →
Trading & Investment Professionals
Deferred bonuses paid in restricted stock or fund units. Treatment mirrors investment banking but is less well understood by mainstream lenders.
View guide →
Hedge Fund Professionals
Performance allocations with equity characteristics, deferred bonus paid in fund units. Similar structuring challenges to PE compensation.
View guide →
R E L A T E D G U I D E S
Explore related guides
Bonus & Variable Pay
How lenders assess discretionary, guaranteed, and deferred bonuses — the cash component that often sits alongside equity awards
Foreign Currency Income
For professionals with USD, EUR, or other non-GBP equity and cash compensation — including currency haircuts and which lenders accept which currencies
Large Mortgage Loans
Routes to borrowing above £1m via high street large-loan teams and private banks — often relevant when equity income pushes the required loan size
Interest-Only for High Earners
When interest-only makes sense as part of a broader wealth strategy — particularly if equity vesting is lumpy or carry hasn’t yet crystallised
A R T I C L E SArticles on equity compensation and mortgages
C A S E S T U D I E SHow we've helped clients with equity compensation
F A Q sFrequently Asked Questions
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Yes — but treatment varies significantly between lenders. Some exclude RSUs entirely and assess only base salary and cash bonus. Others include vested RSU income, typically averaged over 12 to 24 months, as part of the affordability calculation. The key factors are your vesting history, the consistency of receipt, and whether you've been selling vested shares regularly. Unvested RSUs are almost universally excluded. We know which lenders have established frameworks for assessing RSU income and which will produce the strongest result for your profile.
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Rarely, if the options haven't been exercised. Unexercised options — even deeply in-the-money options — are excluded by most mainstream lenders because the income isn't realised. Exercised and sold options that produce cash proceeds are treated as income, provided there's a track record. A small number of private banks will consider unexercised options as part of a broader wealth assessment, but this is bespoke rather than standard.
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Vested deferred stock — tranches that have been released and received as cash or unrestricted shares — can be included by some lenders as part of variable income. Unvested deferred awards are typically excluded, even if the vesting schedule is contractually defined. Where your P60 includes both cash bonus and vested deferred stock, some lenders will use the total figure without distinguishing between the components — which can work in your favour.
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Generally no through mainstream lenders. Carried interest is excluded from most standard affordability models because the timing and amounts depend on fund exits and cannot be predicted. Crystallised carry — distributions that have been paid and received — can sometimes be considered by private banks or lenders willing to exercise judgement on non-standard income, particularly where there's a multi-year track record of distributions.
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Not through mainstream channels. Co-investment capital is locked into the fund until exit, and returns are treated the same way as carried interest — contingent and illiquid. Private banks may consider co-invest holdings as part of an overall balance sheet assessment when determining lending appetite, but the returns themselves won't contribute to a standard affordability calculation.
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It depends entirely on what the lender counts as assessable income. A 5x multiple on base salary alone produces one figure; the same multiple applied to base salary plus averaged RSU income produces a materially higher one. The difference between the right lender and the wrong one — on identical income — can be hundreds of thousands of pounds. We run the affordability calculation through specific lender models and give you exact figures, not ranges.
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This is common and doesn't prevent you from getting a mortgage. We structure the application around your base salary and cash bonus, which most lenders will assess on standard terms. Some lenders will accept the new RSU grant letter alongside a historic track record of equity income at your previous employer, provided the role and sector are comparable. Once the first vesting events at the new firm are evidenced, it may be worth revisiting the affordability to see if a better outcome is available.
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It strengthens the application in most cases. Cash proceeds in your bank account are cleaner evidence than shares sitting in a brokerage account — and some lenders won't count equity that hasn't been liquidated. If you're planning to sell anyway, timing the sale to coincide with (or precede) your mortgage application gives the underwriter the simplest possible picture. We'll advise on timing as part of the application planning.
W H Y U S E A B R O K E RHow Kite Mortgages Helps With Equity Compensation
We structure equity compensation applications every week — RSUs, stock options, deferred stock, and the full range of fund-linked pay. We know which lenders include vested equity, which average it, which exclude it outright, and which teams within each lender handle non-standard income most effectively. For the niche types — co-invest, carried interest, LTIPs — we know when mainstream lending works and when it's time to go to a private bank.
We'll review your full compensation structure, separate it into the components that matter for affordability, identify the strongest lender fit, and package the documentation so underwriters can assess your equity income clearly. If your equity is denominated in USD or another foreign currency, we'll model the haircut across multiple lenders to find the best outcome.