Bank Checks Mortgage Applicants’ Drug Spending | Personal Finance

Bank Shocks Mortgage Applicants with New Query on Drug Spending in Affordability Checks

Metro Bank has recently startled mortgage applicants and brokers by inquiring about their expenditure on drugs, aiming to better understand applicants’ financial habits. This new measure, part of an application form, is designed to evaluate applicants’ lifestyle choices, spending patterns, and their capacity to meet mortgage obligations.

During an application process with Metro Bank, broker Katy Eatenton from Lifetime Wealth Management brought this peculiar inquiry to light. She noted the question appearing in the expenditure section alongside usual categories such as ‘Clothing and Footwear’ and ‘Housekeeping.’ However, the standout query asked applicants to disclose their spending on ‘Alcohol Drinks, Tobacco, and Narcotics.’ According to the Collins Dictionary, narcotics can refer to drugs like opium or heroin that induce sleep and relieve pain, or more broadly, any illegal substance.

Mortgage brokers quickly highlighted the ambiguity, interpreting the question as a probe into recreational drug use. In defense, Metro Bank clarified that the question actually sought to capture expenses on prescription medications rather than recreational drugs.

Metro Bank’s Justification Leaves Room for Speculation

Commenting on the matter, Katy Eatenton expressed surprise at the inclusion of narcotics in the budget planner, noting, “Spending £200 a month on real ale is not the same as £200 a month on illegal substances.” She questioned whether this line of questioning was the right approach, lamenting that it put borrowers in a challenging position.

Similarly, Patricia McGirr, Founder of Repossession Rescue Network, remarked on the oddity of equating a simple pint of beer with illegal substances on mortgage applications. She suggested the bank might need to reassess whether such questions are appropriate for gauging financial responsibility.

Industry Experts Question the Application Form’s Integrity

Other figures in the industry, like Simon Bridgland, Director at Release Freedom, pondered whether the form had been thoroughly vetted before being rolled out. Bridgland questioned the practical implications, wondering if honest admissions of recreational drug use could derail applications entirely.

Ranald Mitchell, Director at Charwin Mortgages, humorously criticized the added scrutiny, suggesting that banks should focus on financial metrics like income and creditworthiness instead of personal vices. “Maybe they’ll start offering fixed-rate mortgages with a side of detox advice,” he quipped, indicating that this level of detail might be overreaching.

On the other hand, Justin Moy, Managing Director at EHF Mortgages, proposed the inclusion of the drug-related question might be an oversight, potentially resulting from the adoption of American-style budget planners that don’t fit the UK context seamlessly. “I suspect this has slipped through due to recent cuts in Metro Bank’s Document Proofing Department,” Moy speculated.

In response to the outcry, a Metro Bank spokesperson explained that the contentious question aimed only to capture information regarding repeat prescription costs and other regular medical expenses. Efforts are made to ensure brokers understand this context to prevent misunderstandings.

If you find yourself navigating the complex terrain of mortgage applications, staying informed about these evolving requirements is crucial. Click Here For More Personal Finance tips and strategies.