Australians are pouring hundreds of dollars a month into popular weight loss medications, believing they’re investing in their health.
But an exclusive new survey reveals this personal choice could sabotage their biggest financial dream: owning a home.
Research from Money.com.au shows the average Australian using GLP-1 medications is spending $610 a month, potentially slashing their borrowing power by a staggering $100,000. These medications include products such as Ozempic, Mounjaro and Wegovy
The nationally representative survey found that 17 per cent of Australians currently take GLP-1 medications.
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Source: Money.com.au
Among them, one in ten people use them for weight loss (10 per cent), while only 7 per cent of Aussies take the drug to manage a health condition like diabetes, according to the research.
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Australians spending hundreds of dollars each month on popular weight loss medications could be unknowingly jeopardising their home loan prospects, with new research revealing a significant impact on borrowing power.
Money.com.au’s Mortgage Expert, Debbie Hays, says lenders are taking new and emerging expenses like GLP-1 medications into account when assessing borrowers.
“GLP-1 medications are still relatively new territory in Australia, but uptake is clearly rising. Lenders are taking regular spending on these drugs seriously, and may factor them in their Household Expenditure Measure assessment, particularly if they’re being used for medical purposes, when you apply for a home loan,” she says.
“If they’re used for medical weight loss, they may be treated as a discretionary expense, similar to health insurance or private school fees. That means the cost can sit on top of essential living expenses like rent, utilities and groceries, and that’s when it can significantly reduce your borrowing capacity.”
How GLP-1 spending could cost borrowers $100k in buying power
Analysis of a standard borrower scenario paints a stark picture.
For a child-free couple earning a combined $220,000 annually, an additional $610 monthly expense on GLP-1 medications, when considered outside the HEM, could diminish their borrowing capacity by approximately $100,000, depending on the lender.
Modelling indicates their maximum borrowing capacity could plummet from $1.2 million to $1.1 million, based on a 30-year owner-occupier loan with principal and interest repayments and a Loan to Value Ratio below 80 per cent.
“If your bank statements show you’re spending hundreds of dollars per month on GLP-1 medications, lenders will ask questions about whether those costs are ongoing and factor them into how much they’re willing to lend you,” Ms Hays says.
“While it’s important for borrowers to prioritise their health, they should also be aware these expenses are treated like any other commitment.”
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For some, the cost of GLP-1 drugs is emerging as a substantial new household expense, potentially costing borrowers a staggering $100,000 in their capacity to secure a mortgage.
For the average Australian spending $610 a month on GLP-1 medications, that outlay represents roughly 15 per cent of the typical $4180 monthly mortgage repayment.
The burden is even higher for younger borrowers; for Millennials spending $760 a month on GLP-1s, that’s equivalent to nearly one-fifth (18 per cent) of the average monthly mortgage repayment in Australia.
Younger Australians lead GLP-1 use for weight loss
The research also highlighted generational trends in GLP-1 use for weight management. Millennials lead the charge, with 18 per cent reporting usage for weight loss and the highest average monthly spend at $760.
Gen Z follows, with 10 per cent using GLP-1 medications for weight loss, averaging $600 per month.
In contrast, only eight per cent of Gen X and two per cent of Baby Boomers report using these medications for weight loss, with lower average monthly spends of $500 and $300 respectively.
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