How Weight Loss Medication Costs Can Impact Your Mortgage

It’s impossible to have missed the rise in popularity of GLP-1 weight loss drugs in the UK over the past few years, with drugs like Wegovy and Mounjuro now used by approximately 40% of the population. However, due to the limited availability of weight loss jobs on the NHS (outside of those with diabetes) the majority of users (around 95% according to a recent University College London study) are hundreds of pounds out of pocket every month for the privilege.

For those with a monthly mortgage repayment, or looking to get on the property ladder, this type of regular outgoing can have a major impact on affordability. Whether you’re a first-time buyer or will need to remortgage soon, it’s important to understand how different mortgage lenders view the expense of private weight-loss prescriptions.

Impact on mortgage affordability

Depending on the dispenser, brand and titration of the medical weight loss jab used, the monthly cost can vary fairly dramatically, from around £100 to over £350 per month. While it could be argued that this is an acceptable level of health spending for those with larger salaries, it far outweighs health costs that will typically be scrutinised during an affordability assessment, such as gym memberships and private medical insurance.

While this type of medication requires prescription, even when used privately, some lenders may view it as an unnecessary cost. While those with health conditions that are impacted by their weight can argue that it’s purely a health-based cost, it could be viewed as cosmetic in some cases.

Whether you’re looking to obtain your first mortgage, or remortgaging your current home, lenders will look at all of your outgoings when considering how much you can afford to borrow. This type and level of outgoing could have a significant impact on your affordability.

For example, a £250 outgoing of any type could reduce your borrowing power by up to £18,000 overall.

How specific mortgage lenders view weight-loss jabs

The majority of lenders view outgoings as either essential or discretionary commitments. An example of an essential living cost would be childcare, whereas a discretionary cost would be tv subscriptions.

But of course, as with any mortgage criteria, different lenders will categorise different outgoings based on their own risk analysis. Some may see health related costs such as gym memberships, for example, as essential. Others are more likely to view this as a discretionary lifestyle cost.

Given the huge rise in popularity of GLP-1 usage, many lenders have already developed policies around their use by mortgage borrowers. Here are how some of those lenders view this type of expense in their current policy:

Nationwide – It’s likely they will see this as an ongoing expense due to the long-term commitment of weight-loss medication, so this would probably limit your borrowing

HSBC – Because they rely heavily on bank statements when considering affordability, any regular outgoing of this value is likely to be questioned. It has the potential to reduce your borrowing if you continue with private weight-loss medication when you take out a mortgage or remortgage

Can it be listed as a discretionary cost?

Given that most treatments are not long-term financial commitments and can theoretically be cancelled at any time, there are potentially more flexible lenders that would be willing to consider this as a discretionary (or one off) cost, providing you’re willing to cancel it prior to your mortgage being agreed.

For example, lenders like Perenna, or Skipton, who are recognised for their flexibility, often view private health related outgoings as discretionary, assuming the outgoing could be stopped in the relative short term without incurring financial or health related issues.

Other potential cost impacts: Insurance

If you’re planning to take out life insurance to protect your mortgage, which some lenders insist upon, Ozempic-like drugs can also have an impact on costs.

Insurers are increasingly aware of the popularity in use of these medications outside of their originally intended use, as well the potential health risks that come with rapid weight loss. In fact, certain insurers are reluctant to use current BMIs to calculate life policies based on the likelihood of re-gaining weight after the jabs.

This has led to high to higher cost premiums for some who have shed multiple stones within six months.

Recommendation

If you’re planning to take out a mortgage or remortgage within the next few months and have been using GLP-1s privately consistently, it’s a good idea to ensure you prepare your accounts accordingly.

While, for some, the health and happiness benefits from their ongoing weight loss is essential, others may choose to put this kind of life change on hold until they have secured the mortgage they need.

Most lenders will want to see 3 months worth of bank statements, or up to 2 years if you’re self-employed. If you’re concerned that a £15-30,000 reduction in affordability would mean missing out on your dream home, it’s a good idea to minimise your spending in the months leading up to your application.