Recent insights reveal that regular expenditures on weight loss drugs could significantly influence the amount of mortgage a first-time buyer is eligible for. Experts suggest that these costs, often treated like any other financial commitment, may reduce borrowing capacity by thousands of pounds.
David Hollingworth, director at brokers L&C Mortgages, admitted he had never seen weight loss drugs influencing mortgage applications before. As outlandish as these examples sound, he admitted lenders may want to ask about things like this. “It’s possible a lender could ask about it,” he remarked.
Fargo financial counselor Jamie Alexander says it’s the effect of the steady cash flow that makes the difference. As he elucidates, funding approximately £250 per month in weight loss drugs would reduce the average cap on loans for first-time buyers with lower incomes by £10,000 to £20,000. This not only impacts overall home affordability, but it creates specific burdens for first-time purchasers or buyers operating in lower-cost markets.
The recent increase in the use of weight loss drugs within the UK demonstrates the timeliness and importance of this topic. Recent studies estimate more than 1.6 million adults in England, Wales, and Scotland have sought help from weight loss medicines. Here’s hoping that this trend continues from early 2024 to early 2025. Most of these people get access to their prescription through the private sector, frequently paying cash themselves.
New weight loss drugs, including Wegovy and Mounjaro, are available via private prescriptions at supermarkets and chemists. The average monthly treatment cost for these medications is between £100-£350, as of last year. Aaron Strutt from Trinity Financial emphasized that if an applicant is spending several hundred pounds each month on such drugs, “the lender is probably going to want to know about it.”
As long as regular payments for weight loss jabs are treated by lenders like any other established outgoing expense, Nicholas Mendes, mortgage news expert at brokerages like John Charcol, said lenders scrutinize applicants’ bank statements. When they see anything with big outgoings it will probably trigger a question or concern over the applicants’ affordability.
The importance of these predictable forms of funding should not be underestimated. For most first-time buyers, their ability to get a mortgage largely relies on just how much they’re spending. Specifically, investments in obesity drugs can largely move the needle. Because more and more people are looking for these treatments, the financial impact is something that cannot be overlooked.
Hollingworth noted that the majority of lenders don’t realize how eating away at home affordability could be connected to spending on weight loss drugs. It’s critically important for any would-be buyer to know their financial obligations first when going through the mortgage process. “It’s not something that’s likely to be picked up en masse,” he said.