Restricted Stock Units (RSUs)

Do Restricted Stock Units (RSUs) count as income for a mortgage in the UK?

Yes, this income does count, but it’s definitely seen as non-standard and complex. There are many ways for this income to be paid, and it can be very irregular.

Because of that, not many high street lenders can help with this type of income – but I have found certain exceptions with particular lenders. Having good contacts is really helpful.

What do we mean by Restricted Stock Units?

RSUs are a form of equity compensation offered by companies, usually to employees.
They represent a promise to give a share of company stock in the future, but only once certain conditions are met – like staying with the company for a set period of time.

They’re not actually shares at first – they’re restricted. Once they ‘vest’, these restrictions lift and they become real shares. The employee can then sell them or hold on to them.

Can I use Restricted Stock Units as proof of a mortgage deposit?

Yes, you can use RSUs as proof of a mortgage deposit, but there are a few important things to be aware of.

Vested RSUs, even if they’re not sold, can be accepted by some lenders. They will typically assess the current market value of those vested RSUs as if they were cashed in, for example.

If you’ve already sold those RSUs, the proceeds are treated as personal savings. They’ll be in your bank account, which is more straightforward, and can be used as your deposit.

Clearly, this is a fairly complex part of income for mortgages. It’s usually helpful to seek advice from a mortgage broker.

Can I use Restricted Stock Units as part of my proof of income?

Yes, that’s the most common way. They can be used as proof of income for mortgage applications, but only under specific conditions with a lender that can accept them.

Some lenders require proof of at least two years of these payments. Other lenders may only need one year if an employee has only been with the company for a certain amount of time.
It’s just a really specialist area.

Can I use RSU income as a first-time buyer?

Yes, as a first-time buyer, you can use this income as part of the mortgage application. Vested RSUs that have already been received or cashed in are really straightforward.

However, some specialist lenders can use RSUs that haven’t vested as part of affordability.
If you’re a first-time buyer, don’t be put off by that.

Are there other stock options that can count towards affordability or proof of deposit?

Yes, absolutely. Aside from RSUs, other types of stock-based compensation we see regularly include vested stocks, where employees have the right to buy shares at a set price, or performance shares, sometimes called incentive stock awards. These might be awarded based on an employee meeting a certain target.