7% of male mortgage holders and 3% of female ones would consider extending their mortgage to pay for cosmetic surgery, equating to 550,000 homeowners, according to a new study.
Mortgage broker Boon Brokers surveyed 2,100 UK homeowners. It found that 20% would extend their mortgage to pay for a medical procedure. 13% of 25-34 year olds would consider using the money to pay for IVF or fertility treatment, while 12% of homeowners would release money to lend to a family member.
Furthermore, 7% of mortgage holders said they would consider lying to their lender about what the money was for – pretending they were using it for home improvements. Depending on the equity available in the home, many mortgage providers prefer additional lending to be used for something which will improve the borrower’s financial situation or the value of the property, with some asking for proof of how the money will be used.
According to the Boon Brokers report, the top 10 things people would consider extending their mortgage to pay for were:
1. Home improvements (32%)
2. A medical procedure (20%)
3. To help out a family member (12%)
4. To buy a new car (8%)
5. To help a family member buy a house (8%)
6. To pay for a holiday (7%)
7. To retrain/study (5%)
8. To pay for IVF/fertility treatments (5%)
9. For a cosmetic procedure (5%)
10. To buy a caravan/campervan (5%)
Other reasons people extend their mortgage are to pay for hobbies, to cover day-to-day living costs, to clear debts, to enable them to take parental leave, to pay for private schooling, to fund a wedding and to allow them to purchase a buy-to-let property.
Men were twice as likely as women not only to want to take out additional lending to pay for cosmetic surgery but also to spend on hobbies or a caravan/campervan.
Gerard Boon, partner at Boon Brokers, said: “Mainstream mortgage lenders are typically very strict on a borrower’s capital raising purpose. For purposes like cosmetic surgery, many mainstream lenders are reluctant to lend.
“The key reason is that lenders would view such capital raising as a sunk cost, with no clear benefit to the applicant’s credit profile, income or the property. Whereas, if the applicant were to borrow money for home improvements or debt consolidation, for example, the lender is more likely to say yes. This is because home improvements increase the value of their security and debt consolidation reduces the risk of the borrower defaulting on financial commitments.”