How Reducing Monthly Bills Can Increase Your Mortgage Borrowing

(Why outgoings matter more than most people realise.)

• Lenders focus heavily on fixed monthly outgoings when assessing affordability.

• Reducing bills can sometimes increase borrowing more than a pay rise.

• Utilities, finance agreements and subscriptions all add up.

• Even £100–£200 a month can make a noticeable difference.

• Reviewing bills is one of the simplest ways to improve mortgage readiness.

1 | Why Monthly Bills Matter So Much

When lenders assess a mortgage application, they don’t just look at your income.

They ask a much more important question:

What money is already committed every month — before the mortgage is added?

These committed costs are deducted from your income to work out how much “headroom” you have for a mortgage.

The higher your fixed bills, the less you can borrow — regardless of salary.

2 | Fixed Costs vs Everyday Spending

Not all spending is treated equally.

Fixed costs lenders care most about:

• Gas and electricity

• Council tax

• Broadband and mobile contracts

• Car finance

• Loans and credit cards

• BNPL agreements

• Childcare costs

What matters less:

• Food shopping

• Fuel

• Occasional takeaways

• Normal lifestyle spending

Lenders use standardised models for everyday spending — but they take fixed costs at face value.

3 | Why Small Savings Can Have a Big Impact

Because mortgages are assessed over long terms, small monthly changes can be powerful.

For example:

• Saving £150 a month = £1,800 per year

• Over a 25–30 year mortgage, that reduction can materially change affordability

In many cases, reducing outgoings improves borrowing power more efficiently than increasing income, especially when pay rises are taxed.

4 | Common Areas Where People Overpay

Many households don’t intentionally overspend — costs just creep up.

Common examples:

• Energy tariffs that haven’t been reviewed in years

• Broadband or mobile contracts rolling onto higher prices

• Multiple streaming subscriptions

• Insurance renewals not reviewed

• Finance agreements taken out at different times

Individually, these costs feel manageable. Together, they quietly reduce affordability.

5 | Timing Matters

If you’re thinking about a mortgage in the next 3–6 months, this is the ideal time to review bills.

Why?

• Lenders look at recent bank statements

• Reduced outgoings show consistency

• Changes made early are easier to evidence

• You avoid rushed decisions just before applying

Bill reviews are most effective before an application — not during one.

6 | This Isn’t About Cutting Everything Back

Reducing bills doesn’t mean living uncomfortably.

It’s about:

• Paying a fair price

• Removing unnecessary costs

• Aligning outgoings with your priorities

Most people can reduce costs without changing how they live.

7 | The Bigger Picture

Lower monthly outgoings don’t just help with mortgages.

They also:

• Improve cashflow

• Reduce financial stress

• Increase savings capacity

• Create resilience if rates change

For lenders, this all points to sustainable borrowing — which is exactly what they want to see.

📞 Want to See Where You Could Save?

This website is information only — we don’t provide mortgage or utility advice.

However, we can put you in touch with specialists who can:

• Review household bills

• Highlight potential savings

• Help reduce fixed monthly outgoings

• Improve overall affordability ahead of a mortgage