Afterpay & Your Mortgage: How BNPL Affects Your Gold Coast Home Loan Application

Buy Now, Pay Later (BNPL) services like Afterpay and Zip have become a part of everyday life for many of us, offering a convenient way to manage purchases. But when it comes to the biggest purchase of your life—your home—how does your BNPL activity look to a mortgage lender?

With new government regulations now officially treating BNPL as a form of credit, it's more important than ever for aspiring Gold Coast homeowners to understand the impact.

BNPL is Now Assessed as a Financial Commitment

The biggest change is that lenders now view your BNPL accounts in the same way they view a credit card or personal loan. It's considered a financial commitment that can affect your borrowing capacity and overall risk profile.

How Lenders Assess Your BNPL Usage

When you apply for a home loan, lenders will look closely at your BNPL history in a few key ways:

1. Your Total Limits: Lenders often consider your total available BNPL limits (e.g., a $2,000 Afterpay limit and a $1,000 Zip limit) as potential debt. They may reduce your borrowing capacity based on these limits, even if you have a zero balance.
2. Your Repayment History: Under the new credit reporting rules, late or missed BNPL payments can now be recorded on your credit file, potentially lowering your credit score and raising a red flag for lenders.
3. The Number of Active Accounts: Having multiple BNPL accounts open can be seen by some lenders as a sign that you are reliant on short-term debt to manage your day-to-day expenses.

A Simple Checklist Before You Apply

Using BNPL doesn't automatically disqualify you from getting a home loan. The key is to manage it smartly in the lead-up to your application. Here’s our advice for Gold Coast buyers:

• Reduce Your Limits: If you don't need a $2,000 limit, log in to your account and reduce it.
• Close Unused Accounts: Pick one service you use most and close the others. This presents a cleaner financial picture.
• Pay on Time, Every Time: Treat your BNPL repayments with the same importance as any other bill to protect your credit score.
• Take a Break: In the 3-6 months before you plan to apply for a mortgage, it's a great idea to pause using BNPL services altogether.

Get Expert Advice on Your Finances

Navigating the path to home ownership means getting your finances in the best possible shape. As your mortgage broker, we provide a full assessment of your financial situation and give you a clear, actionable plan. We can show you exactly how to position your finances—including your BNPL history—to achieve a successful home loan approval.

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