When handled poorly, RSU income can cause confusion, rejected applications. At Limitless, we see the same pitfalls again and again, usually because some brokers or applicants simply aren’t familiar with how banks treat RSUs.
Here are the most common problems to watch out for when using RSU income for a mortgage…
The Biggest Mistake: Declaring RSU Income Incorrectly
This is by far the most damaging error and it usually happens right at the start of the process.
Most brokers don’t understand RSUs, and as a result they often:
Misclassify RSUs as a “bonus” - On paper, RSUs can look like a cash bonus. So a £100,000 salary plus £50,000 in vested shares might get declared as “£100,000 salary + £50,000 bonus” however this is incorrect and it completely changes the bank’s affordability calculation.
Generate an inflated Agreement in Principle (AIP) - When RSU income is entered incorrectly, whether it’s misclassified as a bonus or added incorrectly to base salary, the lender’s automated system will produce an AIP using those incorrect figures.It does not check whether the RSU income is acceptable; it simply uses whatever numbers were typed in.
- Some lenders don’t accept RSU income at all, so the AIP was never achievable.
- Those that do only take a percentage, not the full amount entered.
- The AIP is based entirely on the information entered, and isn’t verified until much later in the process.
This means an AIP can look perfectly valid on paper, but be completely unachievable once documents are reviewed, often leading to a late decline after a client has already had an offer accepted on a property.
Why this happens so often?
The core issue is that every lender treats RSU income differently. So when RSU income is entered incorrectly at the beginning, the automated AIP system has no way of knowing how that particular bank would actually assess the stock.
For example:
- One lender might take 50% of the RSU income and add it to your base salary.
- Another might take the same 50% but treat it as a bonus, reducing how much of it they use.
- Another might take 60% of anything above the P60 basic salary.
- Others don’t use percentages at all and assess RSUs case by case.
Because of these differences, an AIP generated from incorrect input is almost always inaccurate. Most clients only discover this once the bank reviews their documents manually, often weeks later and sometimes after they’ve already had an offer accepted on a property.
Forgetting About Outgoings, Deductions & Salary Sacrifice
Many applicants overestimate what they can borrow simply because they forget to factor in deductions such as:
- Pension salary sacrifice
- Share scheme contributions
- Student loans
- Car allowances
- Other commitments
When people apply directly to a bank or run their own AIP online, they often put their total compensation (salary + stock + bonus + allowances) into the “basic salary” field. This is incorrect and almost always results in an inaccurate borrowing figure.
A hidden advantage: RSUs can help offset childcare costs
Childcare costs such as nursery fees, nannies and private school fees are treated as outgoings. But if you have RSU holdings or ongoing vesting that you don’t need for borrowing, the bank may allow you to use those shares to offset childcare expenses.
This can dramatically increase borrowing.For example:
- One client had £60,000/year of school fees
- They also had £300,000 in RSUs
- We used the stock to evidence they could cover those fees for years
- The childcare costs were then removed from the affordability calculation
Relying on Price Comparison Websites
Price comparison websites can be a great place to start your research. They give a helpful overview of what the market might look like and can be useful for getting a feel for current rates. However, when RSUs are part of your income, it’s important to treat these sites as a guide rather than a guarantee.
Here’s why:
Products can occasionally be out of date or inaccurate - Sometimes the rates shown online are older versions, not yet updated, or listed incorrectly. These issues are usually just data delays or technical errors (not deliberate mistakes) but they can still result in confusion if you’re relying on them for exact figures.
Eligibility varies from person to person - A rate shown on a comparison site might be available for some applicants, but not others. Eligibility often depends on details that comparison sites can’t fully account for, such as:
- Deposit size
- Property type
- Your income breakdown (RSUs, bonus, allowances, etc.)
- Credit profile
- Transaction type (remortgage, purchase, new build)
- EPC rating
- Lender-specific RSU rules
For straightforward applications, comparison sites can be reasonably accurate. But for RSU-based income where lender criteria vary widely, the product you see online may not reflect what you personally qualify for.
The Solution: Work With Mortgage Broker Who Specialises in RSU Mortgages
RSU income isn’t simple. Lenders have different rules, different percentages, and different ways of interpreting the same documents.
At Limitless Financial Services, we specialise in RSU lending, processing more RSU-based mortgage enquiries than every other UK broker combined. This gives us:
- The experience to present your RSUs correctly
- Direct lines to lender teams who manually review stock-based income
- The ability to secure accurate AIPs upfront
- Knowledge of which lender suits which applicant profile
Getting RSUs wrong can cost you your dream home. Getting them right can dramatically increase your borrowing.
If you want your RSU income to work for you, not against you, speak with one of our specialist advisors.
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