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Halifax not recognising my holiday pay for mortgage

26 replies

dimdimdush · 18/03/2022 21:00

I'm a contractor currently employed on a fixed-term contract which has been renewed several times. I'm on a fixed day rate but get holiday allowance on top of that. We're going through a financial advisor to get us a mortgage and got to the AIP stage with Halifax. However, they've now come back saying they won't count my holiday allowance as salary. This means there's now a £100k difference between what they'd initially said they'd be willing to lend vs now. I'm really worried. Has this happened to anyone else? Our broker has gone back and asked the underwriter to check my contract which states any holidays not taken will be accrued and that payment made in one lump some later on but I'm not sure if this is a point if no return for Halifax or not.

Needing reassurance :(

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Butitsnotfunnyisititsserious · 18/03/2022 21:07

I had the same issue with Halifax and the broker suggested trying Nationwide, who have queried it as well. It's caused no end of stress. Still waiting for Nationwide's decision, albeit it's not been long. I hope you get an answer soon Thanks

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Yayayaya20 · 18/03/2022 21:10

I found the literature on the Halifax intermediaries really helpful to get the actual facts about what they'd allow and not allow.

Might not be helpful to you though!

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dimdimdush · 18/03/2022 21:18

Aargh, I'm not the only one- which is reassuring it's not just me but I'm wondering why they're taking this stance when holiday pay on top of my basic day rate is part of my salary. Interestingly, our broker has suggested trying nationwide too. I'm so stressed about it all :/

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dimdimdush · 18/03/2022 21:20

@Butitsnotfunnyisititsserious

I had the same issue with Halifax and the broker suggested trying Nationwide, who have queried it as well. It's caused no end of stress. Still waiting for Nationwide's decision, albeit it's not been long. I hope you get an answer soon Thanks


I've been in my current role just under a year and nationwide wants a minimum of 12 months employment in the same role so I don't think I'll qualify with them :/
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Jmaho · 18/03/2022 21:27

Need more info on this. I'm an underwriter (not for Halifax) how are you contracting? Via limited company or umbrella company or something else? What happens when you do actually take holiday do you get paid as normal i.e basic plus holiday allowance or is it unpaid? What are you wanting them to take as your income? Daily rate x how many days a week/weeks a year?

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PinkTonic · 18/03/2022 21:34

Our broker has gone back and asked the underwriter to check my contract which states any holidays not taken will be accrued and that payment made in one lump some later on

Are you expecting them to count potential extra income from holiday not taken?

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dimdimdush · 18/03/2022 23:19

@Jmaho

Need more info on this. I'm an underwriter (not for Halifax) how are you contracting? Via limited company or umbrella company or something else? What happens when you do actually take holiday do you get paid as normal i.e basic plus holiday allowance or is it unpaid? What are you wanting them to take as your income? Daily rate x how many days a week/weeks a year?


Would you mind if I PM'd you? I'm beyond stressed and have the whole weekend to tie myself in knots before we get an answer at some point next week :/
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dimdimdush · 18/03/2022 23:22

@PinkTonic

Holiday pay is included in my pay (if I take the two days I'm entitled to in a month) or if I don't take holidays, I'm paid them in one lump some at the end of my contract/when my contract is renewed IYSWIM.

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ChicCroissant · 18/03/2022 23:27

Do you mean that you have a basic rate but with an additional payment included for holiday pay? For example, your basic rate is £10 per hour but you actually get paid £11.50 per hour - and the mortgage company is only counting the £10 rate? Although that wouldn't match up with being paid for holidays not taken at a later date!

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Babyvenusplant · 18/03/2022 23:34

So theoretically if you were to take all your holidays you wouldn't receive the lump sum of holiday pay? Is that correct?

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leeds2glasgow · 18/03/2022 23:34

I got a nationwide mortgage after only being on my role 5 months 🤷‍♀️

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TheTeenageYears · 19/03/2022 00:25

The problem is you only receive the money at the end of the contract if you haven't taken holiday. Most people will at some point take all or part of a holiday entitlement. It's like bonus payments, in no way guaranteed. I don't know why you would think they would accept it as part of income.

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caringcarer · 19/03/2022 01:02

Mortgage broker found The Leeds Building Society were more tolerant and accepted more than other ones. You could ask your broker to check them.

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Overthebow · 19/03/2022 07:39

[quote dimdimdush]@PinkTonic

Holiday pay is included in my pay (if I take the two days I'm entitled to in a month) or if I don't take holidays, I'm paid them in one lump some at the end of my contract/when my contract is renewed IYSWIM. [/quote]
So you only get the payment if you don’t take the holidays? If that’s correct I don’t see how they could include it for the mortgage, as surely you could take the holiday and not get the money if you wanted?

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PinkTonic · 19/03/2022 08:41

[quote dimdimdush]@PinkTonic

Holiday pay is included in my pay (if I take the two days I'm entitled to in a month) or if I don't take holidays, I'm paid them in one lump some at the end of my contract/when my contract is renewed IYSWIM. [/quote]
Yes I do see exactly what you mean. Getting the money is contingent on not taking the time. The lender can’t know or enforce whether you’ll take your holiday allowance. It’s like me saying I’ll earn more than I actually do because I’ll do holiday sell back.

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PinkTonic · 19/03/2022 08:44

And actually, you have to take the statutory minimum so there’s a limit on how much you can exchange for cash anyway.

No lender would agree to this.

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Candleabra · 19/03/2022 09:22

So you getting this lump sum is dependent on you not taking any holidays at all?
I can see why this isn’t included for the calculations. It’s also not sustainable for you to be basing your standard earnings on 100% productivity (even purely from a health and well-being perspective)

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waitingformytakeaway · 19/03/2022 11:16

So wouldn't this be the same as someone in a regular job just adding five weeks salary to their annual amount and saying they'll not take holidays and just get paid them in addition to the worked hours that week?

I can see why they're not keen if it is similar.

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dimdimdush · 19/03/2022 11:38

Sorry, I should've clarified:

I'm Contracting via an agency, I get paid PAYE from the agency with tax deducted at source. I have a day rate and a holiday allowance on top.

The holiday allowance is accrued on a daily basis and is paid when I take the holiday, this is in addition to my day rate.

If I don't take the holiday it is paid to me at the end of the year holiday year or end of my contract, whichever is soonest.

An example of this is in my December payslip, I was paid my accrued holiday for 2021 as the holiday calendar reset at that point.

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PinkTonic · 19/03/2022 13:38

@dimdimdush

Sorry, I should've clarified:

I'm Contracting via an agency, I get paid PAYE from the agency with tax deducted at source. I have a day rate and a holiday allowance on top.

The holiday allowance is accrued on a daily basis and is paid when I take the holiday, this is in addition to my day rate.

If I don't take the holiday it is paid to me at the end of the year holiday year or end of my contract, whichever is soonest.

An example of this is in my December payslip, I was paid my accrued holiday for 2021 as the holiday calendar reset at that point.

You haven’t clarified. You’ve just confirmed why this can’t be included.

The holiday allowance is accrued on a daily basis and is paid when I take the holiday, this is in addition to my day rate

If I don't take the holiday it is paid to me at the end of the year holiday year or end of my contract, whichever is soonest

Why would the lender lend on the basis you won’t take the holiday?
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Boorfi · 19/03/2022 13:40

It doesn’t matter whether OP takes the holiday or not, she still gets the money!

Of course it should be included in the calculations.

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RagzRebooted · 19/03/2022 13:45

@Boorfi

It doesn’t matter whether OP takes the holiday or not, she still gets the money!

Of course it should be included in the calculations.

But if OP worked full 52 weeks without taking holiday, they would be paid for 52 weeks work plus a year's worth of holiday pay. If they worked 48 weeks and took 4 weeks holiday, they'd be paid for 48 weeks plus 4 weeks 9f holiday (52 weeks total).
In the first scenario, they take home more money.
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Comefromaway · 19/03/2022 13:49

The holiday allowance is accrued on a daily basis and is paid when I take the holiday, this is in addition to my day rate

If I don't take the holiday it is paid to me at the end of the year holiday year or end of my contract, whichever is soonest

Why would the lender lend on the basis you won’t take the holiday?


They should lend because this is how every normal employed person accrues holiday.

For every week you work you accrue x amount of holiday. You get holiday pay when you take the time off. Some workplaces will pay out a lump sum of holiday pay if you don’t take it all.

So my daughter who started work half way through the year has accrued lots of holiday because they limited holiday at Xmas and she wasn’t working for them last summer.

She works 5 shifts per week.

At the moment she’s being paid for 6 shifts per week to use up her accrued holiday.

The OPs Day Rate plus Holiday allowance equals an annual amount. Halifax must be dense if they can’t see it’s her contractual entitlement which doesn’t change.

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Comefromaway · 19/03/2022 13:51

So are they saying they won’t take overtime into account.

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Tutt · 19/03/2022 14:07

Think it may be like mine.
I do take holiday as and when I like HOWEVER I only apply for holiday pay once a year.
I get paid and accrue holiday pay on the actual hours I work regardless o0f any holiday I actually take.
I got my mortgage with Natwest although I didn't put holiday pay which would have upped it lots in, DH is self employed and they were very good.

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