💷 Why Saving £200 a Month Can Matter More Than a Pay Rise
A simple truth about affordability most borrowers overlook.
- Lenders focus more on monthly outgoings than one-off income increases.
- A £200 saving each month can improve affordability more than a small pay rise.
- Fixed costs have a bigger impact than lifestyle spending.
- Lower outgoings help with stress testing and borrowing limits.
- Reviewing bills is often the fastest way to improve mortgage readiness.
1 | Why This Sounds Backwards (But Isn’t)
Most people assume the best way to improve their mortgage chances is to earn more.
In reality, lenders often care just as much — if not more — about what’s already leaving your account each month.
That’s because:
- Pay rises are taxed
- Bonuses aren’t always guaranteed
- Income can fluctuate
But fixed monthly bills are treated as permanent commitments.
2 | How Lenders Actually Look at the Numbers
When assessing affordability, lenders:
- Start with your income
- Subtract fixed monthly outgoings
- Apply stress testing at higher interest rates
That means every £1 of monthly spending reduces borrowing power.
Saving £200 a month doesn’t just save £200 — it improves the surplus income figure lenders use in their calculations.
3 | Why Pay Rises Don’t Always Help as Much as Expected
A £3,000 annual pay rise might sound meaningful.
But once tax and National Insurance are applied, the actual monthly benefit could be closer to £150–£170.
Compare that to:
- £60 saved on energy
- £40 saved on broadband & mobile
- £50 saved on subscriptions and insurance
- £50 saved on finance costs
Suddenly, outgoings reduction looks far more efficient.
4 | Fixed Costs vs Lifestyle Spending
Lenders don’t usually scrutinise:
- Food shopping
- Fuel
- Occasional takeaways
They do scrutinise:
- Utilities
- Phone and broadband contracts
- Car finance
- Loans and credit cards
- BNPL commitments
- Childcare
Reducing fixed costs improves affordability without changing how you live.
5 | Timing Matters More Than People Realise
If you’re thinking about a mortgage in the next few months:
- Reducing bills early shows consistency
- Bank statements look cleaner
- Affordability calculations improve
- Stress testing becomes easier
Trying to make changes right before applying is far less effective.
6 | The Bigger Picture
Lower outgoings don’t just help with mortgages.
They also:
- Improve cashflow
- Reduce financial stress
- Create resilience if rates rise
- Make borrowing feel more comfortable
From a lender’s perspective, that’s a safer, more sustainable borrower.
📞 Want to See Where You Could Improve Affordability?
This website is information only — no advice is provided.
However, we can introduce you to specialists who can:
- Review fixed monthly outgoings
- Identify potential savings
- Help improve affordability ahead of a mortgage
- Support better financial preparation
Information only: This website doesn’t provide advice. We introduce visitors to specialists who can provide guidance in their own regulated areas.