Overtime and Borrowing Capacity: We Have a Solution

 

Over the last 12 to 18 months, due to pressure from the regulator, lenders have gradually tightened their policies on overtime income and penalty allowances and now all but a few lenders will only include a percentage of this income type when calculating a client’s serviceability for a loan.

Traditionally, lenders have always weighted this type of income due to its inconsistent nature, however there are fewer and fewer lenders in the market willing to include enough of this type of income to have a significant impact on the client’s borrowing power. This is particularly challenging for clients who work in industries that rely heavily on penalty rates or shift work, for example nurses and police officers who in some cases make up over half of their pay from overtime or shift allowances.

Launch Finance has access to a lender who will consider using 100% of the individual’s overtime and/or penalty allowances when calculating a client’s borrowing capacity, meaning that every dollar you earn in overtime and penalties will count towards your borrowing power and their interest rate is still competitive!

If you or someone you know heavily relies on overtime or penalty rates and is looking to maximise their borrowing capacity, contact one of our experienced brokers today so that we can put you in touch with the right lender for your situation.