Virgin Money is now open to including variable income in its affordability assessments.
The lender will accept 60 per cent of any bonus, commission, or overtime income and, for variable pay received monthly, will use 60 per cent of the pay from the lowest of the most recent two payslips.
In the latter scenario, if the year-to-date figure is lower, Virgin Money will use 60 per cent of the variable pay showing in this calculation.
In the case of variable pay received annually, six monthly or every quarter, Virgin Money will use 60 per cent of the two-year average or 60 per cent of the most recent year if it is lower.
Variable income must have been received after 2 December 2020 to show that the potential borrower is still earning it, the lender adds.
In a note to brokers, Virgin Money says that if some variable income is received before the above data and some after, the calculation will still proceed.
