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Mortgage madness as "Friday night pint gets lumped in with meth"

ended 23. September 2024

Last week, broker Katy Eatenton at Lifetime Wealth Management  alerted Newspage to a mortgage application that she was filling out for a client. In the Expenditure Type section between the usual monthly expenditure like ‘Clothing and footwear’ and ‘Housekeeping’ were ‘Alcohol drinks, tobacco and narcotics’.

We asked brokers for their views on this, what it means for consumers and how prospective borrowers should respond to a question like that without looking like Tuco from Breaking Bad? Said Katy:

"I couldn’t believe my eyes when completing a Metro application recently: alcohol, tobacco and narcotics had its own line item on their budget planner. Spending £200 a month on real ale is not the same as £200 a month on crack cocaine. I’m all for inclusivity, but is this really the route we should be going down? It leaves prospective borrowers in a very awkward position as to how to respond."

Added Patricia McGirr, Founder at Repossession Rescue Network: “It's a whole new world when your Friday night pint gets lumped in with meth on your mortgage application. You might enjoy a fine pint of Guinness at the local, but does ticking the same box as a cartel kingpin suggest lenders think your regular tipple is an inevitable descent into a very different type of black gold.”

8 responses from the Newspage community

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Simon Bridgland
Director at Charwin Private Clients
It sounds as though the lender has used Ctrl c, Ctrl v when they put the application form together, not giving too much thought to what they were typing. The use of the word narcotics conjures up all sorts of images, not least Tony Montana covered in flour filling in a mortgage application in a Metro branch near you. Does this mean lenders actually think borrowers are now going to start fessing up to 'recreational drug use' on an application? If they did, would this simply kick out an application, or, if they deal to their friends as a 'side hustle' can they use the income to support the application. Just asking, for a friend.
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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
I couldn’t believe my eyes when completing a Metro application recently: alcohol, tobacco and narcotics had its own line item on their budget planner. Spending £200 a month on real ale is not the same as £200 a month on crack cocaine. I’m all for inclusivity, but is this really the route we should be going down? It leaves prospective borrowers in a very awkward position as to how to respond.
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Patricia McGirr
Founder at Repossession Rescue Network
It's a whole new world when your Friday night pint gets lumped in with meth on your mortgage application. You might enjoy a fine pint of Guinness at the local, but does ticking the same box as a cartel kingpin suggest lenders think your regular tipple is an inevitable descent into a very different type of ‘black gold’. Or are they just bracing for inflation, knowing it’s a toss-up whether it’ll be your mortgage or Netflix bill that takes you over the edge. Maybe lenders are saying, “We get it. Life’s tough. Now, declare your vices.” It’s an existential dilemma; is wine ‘housekeeping,’ or are we just one Liebfraumilch away from liability? Perhaps it's time to add a new box: “Other coping mechanisms.” After all, life’s challenges aren't getting any smaller, nor are the drink bills.
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Justin Moy
Managing Director at EHF Mortgages
I suspect this has slipped through the Document Proofing Department, as Metro has cut several positions recently so this must have been one of those key roles. Lifted from an American budget planner, this says as much about plagiarism as societal change. Is there space for Sky Betting on the budget planner?
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
Ah, just what UK mortgage affordability forms were missing—narcotics! Because, of course, when you're applying for a mortgage, the first thing lenders need to know is how much you're spending on your weekend "trips." Never mind income or credit, let's make sure we track every last penny you might spend on that "high" life. What's next? A line-by-line breakdown of how much you blow on the nose candy vs. the wacky baccy? It's as if the banks are saying, “Forget financial responsibility! We just want to make sure you're not getting *too* addicted to the dream of homeownership.” Maybe they'll start offering fixed-rate mortgages with a side of detox advice. One small step for lenders, one giant leap for a society where your substance of choice affects your interest rate. Honestly, this new level of scrutiny? It's really hitting rock bottom.
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David Stirling
Independent Financial Advisor at Mint Wealth
We are entering an age when technology is doing so much for us, that the lenders can now verify income using Open Banking credits without the need for bank statements or payslips. With many requesting copies of bank account statements on application for secondary bank accounts such as Revolut, it seems increasingly hard to hide any "bad habits" from the banks. Gambling has also been picked up by some lenders and added as an outgoing, knocking affordability down.
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Ben Perks
Managing Director at Orchard Financial Advisers
The British public have endured Brexit, Covid, Partygate, Trussonomics, a Cost of Living Crisis, a Recession and the rising cost of mortgage borrowing. It’s perfectly reasonable for the lender to assume half the population have turned to narcotics and therefore prudent to include it in affordability calculators.
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Darryl Dhoffer
Founder at The Mortgage Geezer
You can imagine the lender looking over this case: Thank you for your application for a mortgage. We have carefully reviewed your application and supporting documents. Unfortunately, we are unable to approve your loan at this time. While your credit history is generally satisfactory, we have concerns about your spending habits. Your expense categories, such as "Money Pit," "Expense-O-Rama," and "The Great Drain," indicate a lack of financial discipline and a tendency to overspend. Additionally, your recurring expenses, like "Cash-Flow-O-Matic," "Rent-a-Home," "Food-O-Plenty," "Gas Guzzler," and "BillsVille"," are significantly higher than your income. Your expense references on "Cuba's Finest", "Hits from The Bong" and "Weedman" are perfectly acceptable however. We recommend that you take steps to reduce your expenses, increase your income, or both before reapplying for a mortgage. Thank you for your understanding.