Can BIK be counted in Mortgage Calculation?

Statusquo73 · 26-11-2020 1:18am #1

Hi Guys

Thank you in advance stopping by and reading my question.

Can Benefit in Kind could be counted as an income for mortgage calculation?

Unfortunately my salary is not enough to be qualified for Help to buy scheme. If my BIK will be added in mortgage calculation then I am eligible.

Just not sure if it can be done and if yes, which banks accept this?

Thank you in advance

Mehdi

Lexio7 · 26-11-2020 4:48pm

I would think no, as BIK is not actual income.

I could be wrong, so happy to see what others say.

What exactly is the benefit you want to class as income?

colm_mcm · 26-11-2020 4:50pm

Do you mean expenses?

Allinall · 26-11-2020 4:53pm

BIK is regarded as income by Revenue, so I would say you should have a strong argument.

It is, in effect, your employer paying for a private expense that you would otherwise have to pay yourself.

Smee_Again · 26-11-2020 4:57pm

MY health insurance BIK wasn't included when I applied.

Lexio7 · 26-11-2020 5:48pm

Allinall wrote: »

BIK is regarded as income by Revenue, so I would say you should have a strong argument.

It is, in effect, your employer paying for a private expense that you would otherwise have to pay yourself.

That does not make sense.

A common type of BIK is private health insurance.

Are you suggesting that every single person who receives BIK for health insurance would have paid for it if they had not received this BIK.

BIK is a non cash benefit but taxed at the cash price.

Mitch Connor · 26-11-2020 5:52pm

Lexio7 wrote: »

That does not make sense.

A common type of BIK is private health insurance.

Are you suggesting that every single person who receives BIK for health insurance would have paid for it if they had not received this BIK.

BIK is a non cash benefit but taxed at the cash price.

if you have to pay tax on BIK, then why would it not be considered part of your pay?

When I went for a mortgage years ago via a broker I got BIK stuff included (fuel allowance and some other stuff) but that was before things got clamped down upon (around 10 years ago). I ended up not taking up the mortgage in the end, so can't say for certain if there would have been problems firming everything up.

Sofa King Great · 26-11-2020 5:56pm

Mitch Connor wrote: »

if you have to pay tax on BIK, then why would it not be considered part of your pay?.

Well you can't exactly use part of your health insurance or a quarter of your parking spot to make a mortgage payment.

Mitch Connor · 26-11-2020 6:27pm

Sofa King Great wrote: »

Well you can't exactly use part of your health insurance or a quarter of your parking spot to make a mortgage payment.

In my old place we had an alotment of BIK 'cash' to spend on things - health insurance, gym membership, extra holidays -back when I worked there and went for a mortgage the value of this BIK package was taken into account.

Statusquo73 · 27-11-2020 12:22pm

Thank you for the replies guys.
Apparently Bank of Ireland is the only bank that counts Benefit in Kind( Health insurance) in mortgage calculations

I heard this information today from the bank of Ireland Mortgage manager.
I think it should be counted as @Allinall suggested.

IF my employer wont pay I have to pay from my own pocket. Instead I am being taxed a little bit in my payslip/

L1011 · 27-11-2020 12:26pm

Mitch Connor wrote: »

In my old place we had an alotment of BIK 'cash' to spend on things - health insurance, gym membership, extra holidays -back when I worked there and went for a mortgage the value of this BIK package was taken into account.

I worked somewhere that did that; but instead changed to just giving you the cash with salary (and hence taxed but also counting towards any mortgage calculations) on production of proof you'd paid for it - health insurance, gym, sports team subs were allowed. This is worth asking for if its a SME cause its less admin effort for the employer and potentially better for the employee.

Only helps in a salary multiplier not a whats left stress test; but that would apply for counting BIK content anyway.

ec18 · 27-11-2020 12:57pm

Statusquo73 wrote: »

Thank you for the replies guys.
Apparently Bank of Ireland is the only bank that counts Benefit in Kind( Health insurance) in mortgage calculations

I heard this information today from the bank of Ireland Mortgage manager.
I think it should be counted as @Allinall suggested.

IF my employer wont pay I have to pay from my own pocket. Instead I am being taxed a little bit in my payslip/

is it a health insurance BIK you are trying to include?

If you are then the bank is right not to include it. If your employer stops paying the BIK then you have a choice to buy health insurance and if you did it would be factored in your capacity to re pay the mortgage as an ongoing expense.

However having it paid by your employer also doesn't show that you could afford a larger mortgage (which would be the point of including it).

Can BIK be counted in Mortgage Calculation?

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