Buy now, pay later. It sounds convenient and harmless, right? Splitting purchases into smaller, interest-free instalments can feel like an easy win, especially when cost-of-living pressures are already stretched.
It’s no surprise Buy Now, Pay Later (BNPL) services like Afterpay have surged in popularity. In fact, the value of BNPL transactions in Australia is expected to grow from around $17 billion in 2023 to more than $30 billion by 2029.
But if you’re planning to buy a home, there’s an important catch. Recent changes to how BNPL services are regulated mean these platforms can now directly affect your borrowing power and your chances of home loan approval.
What’s changed with BNPL?
For years, BNPL services were able to operate outside Australia’s credit laws. Signing up was quick and easy, often with no real checks on your income, expenses, or ability to repay.
This led to growing concern about overspending. Research from Australian Securities and Investments Commission found that:
- 1 in 5 BNPL users cut back on essentials like food to meet repayments
- 1 in 6 took out another loan just to cover BNPL repayments
Because of this, the government stepped in. From June 2025, BNPL providers became regulated under national credit laws, bringing them more in line with credit cards and personal loans.
BNPL providers must now:
- Hold an Australian Credit Licence
- Conduct affordability checks before approval
- Follow responsible lending obligations
Most importantly for home buyers, missed BNPL payments can now be reported to credit bureaus and show up on your credit report.
How BNPL can affect your home loan
When you apply for a home loan, lenders don’t just look at your income and deposit. They also assess your credit score, credit report, and overall spending behaviour.
With BNPL now included in credit reporting, missed payments can signal fnancial risk to a bank. Even if you’ve never missed a repayment, frequent or ongoing BNPL use can still raise concerns. From a lender’s perspective, it may suggest cash flow pressure or reliance on short-term credit to cover everyday expenses.
The good news is that occasional, well-managed BNPL use is unlikely to derail your home loan application. If accounts are paid on time and balances are low, many lenders will view this as manageable.
Where it becomes an issue is when BNPL is used regularly, balances remain open, or payments are missed. In those cases, BNPL can reduce borrowing power or delay approval altogether.
What should you do if you’re planning to buy?
If you’re thinking about buying a property in Perth, it’s a smart move to tidy up your BNPL habits early.
Here are a few practical steps I often recommend:
- Pay off any outstanding BNPL balances
- Reduce or stop using BNPL where possible
- Close unused BNPL accounts
- Lower BNPL spending limits if available
It’s also worth checking your credit report to see what’s showing. You can access a free report through:
- Equifax Australia
- Experian
- illion
If you notice errors or outdated information, raise it directly with the credit reporting body so it can be corrected before you apply for a loan.
Planning ahead makes all the difference
Understanding how everyday spending affects your credit profile is crucial before applying for a home loan. If BNPL use feels hard to manage, speaking with a qualified financial adviser or financial counsellor can help you get back on track and strengthen your overall financial position.
When you’re ready to explore your home loan options, I’m here to help. As a Perth mortgage broker, I’ll look at your full financial picture and guide you on how to present the strongest possible application. If you’d like to chat, get in touch and let’s take the next step toward home ownership with confidence.
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