Mortgage approval question - car allowance

dec1892

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I have a question regarding mortgage approval criteria. I’ve been offered a new job, however the structure of the salary is structured differently to my current employer. At the moment, I’m on a regular base salary, however my new overall package will be made up of a base salary that is 15% less than my current base salary, but will have a car allowance and cash allowance which will more than make up for the 15% reduction in my base salary. This car allowance and cash allowance will get paid the same way as the base salary (i.e. in my monthly pay packet and taxed as per normal etc) so that my overall monthly net pay take home pay will be more than my current monthly net pay.

My question is, if applying for a mortgage, how will the bank look at this? Will they consider only my base salary even though the car allowance and cash allowance are guaranteed (as far as I know, but will verify this with the company before signing anything.)

Thanks
 
In short, if you can confirm that the allowances are guaranteed then that should be taken into account by the bank when calculating your affordability.
 
Watch out for pension eligibility - normally, car allowances are not allowable for pensions (the logic being that you don't need your car for business when you retire, so they ain't going to pay the cost). This generally means that any pension contribution paid by your employer will not cover the car allowance. You should take this into account in your decision making.
 
Watch out for pension eligibility - normally, car allowances are not allowable for pensions (the logic being that you don't need your car for business when you retire, so they ain't going to pay the cost). This generally means that any pension contribution paid by your employer will not cover the car allowance. You should take this into account in your decision making.

As in the pension contribution from the company will be off the base salary alone (not incl car allowance)? Yeah, that's the case here.
My main concern though is how the bank (AIB in my case) will consider it when making a judgement on my affordability for a mortgage? My net pay per month will be actually more than now, but my base salary less than I currently earn
 
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