When people refer to an RSU mortgage, they’re referring to the way a lender assesses the mortgage applicants income. Limitless Financial Services is a whole of market mortgage broker who have been specialising in mortgage advice for people receiving RSU income since 2018. We partner with many big technology companies directly to support their employees when buying a new home or looking for a remortgage.
How can RSU income impact my mortgage application?
In general, when you apply for a mortgage, most lenders or brokers will use a multiple basic income (e.g. salary) less any financial commitments (e.g. debt) to calculate how much you can borrow. If you happen to receive a large proportion of your income in the form of RSUs, more often than not this income won’t be counted towards your maximum borrowing figure.
How can I use my RSU income?
Only 3 years ago, there were just a handful of lenders that would accept this income. Limitless has been working with many lenders to explain how RSUs work, and to get their underwriters more comfortable with this type of remuneration. We have started to see several high street banks start to work with us and accept RSU income.
With more choice now, there is a wider range of criteria (depending on the lenders underwriting policies). Some lenders like to see several years evidence of vested RSU income, whereas others can be more flexible and only require 1 year. It is best to speak to an adviser to understand which lender would work best for your situation. Limitless Financial Services is fee free and we can often secure a decision in principle for you within a few hours of your appointment. Get in touch to book a call.
What if my RSU income is reflected in US dollars or another foreign currency?
Some mortgage lenders will accept RSU income in a foreign currency. The compensation will be converted into sterling and treated in the usual way for affordability purposes.
How does the economic outlook affect RSU mortgages?
The economic outlook can affect a mortgage lender’s decision on how much bonus or vested stock they can use. During times of economic uncertainty, lenders may be more cautious and use a smaller percentage of the bonus or vested RSU. For example, during the COVID crisis in 2020, most lenders stopped using any income over and above an employee’s basic salary (with the exception of handful of lenders).
In 2023, the Russia-Ukraine conflict and measures to combat inflation have had an impact on the economy. We’ve seen interest rates soar, but on the whole, lenders have not withdrawn or restricted their RSU income criteria.
