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Weight Loss Drugs Slash Home Loan Power
26 Mar
Summary
- Monthly spending on weight loss drugs can reduce borrowing capacity by $100,000.
- Lenders assess GLP-1 medication costs as discretionary expenses.
- Millennials spend up to $760 monthly on weight loss drugs.
Australians utilizing popular weight loss medications such as Ozempic, Mounjaro, and Wegovy are discovering a significant impact on their borrowing capacity for home loans. Research indicates that the average monthly expenditure of $610 on these GLP-1 medications can reduce a potential borrower's capacity by up to $100,000.
Lenders are actively considering these regular drug costs, often factoring them into the Household Expenditure Measure (HEM). If deemed a discretionary expense, similar to health insurance, these costs can substantially decrease the amount a person can borrow. Lenders will question significant regular direct debits on bank statements, impacting loan assessments.
This financial scrutiny is hitting younger demographics harder, with 18 percent of Millennials reporting monthly costs of up to $760 for these drugs. A child-free couple earning $220,000 combined, with a $610 monthly medication expense, could see their borrowing limit drop from $1.2 million to $1.1 million, demonstrating the substantial effect on homeownership aspirations.
