The Starbucks myth

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Your 2-minute guide to demystifying money and making you richer

Does your daily caffeine fix affect your ability to get a mortgage?

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The Starbucks myth

One of the most divisive debates in personal finance is “the Starbucks myth”. This is the idea that if you give up your daily habit of buying a latte at expensive coffee chains you’ll be able to save enough money to buy a house. 

The numbers typically look like this: If you spend £4 a day, every day, at Starbucks then that’s about £120 per month. In a year, that’s £1,440. If you’re looking at a mortgage with a 5% deposit then £1,440 would get you a £28,800 chunk of the loan. By amazing coincidence, the average price of a house in the UK right now is £285,000. So your Starbucks habit is costing you almost exactly 10% of your mortgage!

Therefore, if you’re drinking at Starbucks you …