BNPL in Australia: New Rules & How It Affects Your Home Loan
- My Finance Agent
- Feb 24
- 4 min read
New BNPL regulations in Australia starting in June 2025 may impact your credit score and home loan eligibility. Learn how BNPL affects mortgage applications
What Is Buy Now Pay Later (BNPL)?
Buy Now Pay Later (BNPL) services let shoppers split purchases into installment payments. They offer interest-free repayment options when paid on time. Many Australians use BNPL instead of credit cards because of quick approvals and no credit checks—but this is about to change.
Is BNPL Safe for Your Finances?
BNPL can make spending more manageable. However, research shows it has the potential to lead to overspending and financial stress. For instance, many users sign up for multiple BNPL accounts, making it harder to keep track of payments and manage spending limits.
Many BNPL users are also not aware that lenders look for and assess BNPL usage before approving loans. For those applying for a mortgage, personal loan, or car loan, this means that your BNPL history could affect your chances of being approved for finance.
The Growth of BNPL in Australia
BNPL platforms like Afterpay, Zip Pay, Klarna, and PayPal Pay In 4 are now common payment options.
In 2022-2023, Australians spent $19 billion on BNPL
This was $7 billion more than the previous year
Young adults prefer BNPL over credit cards for everyday expenses.
What's behind the rapid growth of BNPL services? Previously, BNPL services were not classified as credit products. This made opening a BNPL account fast and easy. But all that is about to change in 2025 under new Australian BNPL regulations.
How BNPL Works & How Providers Make Money
With BNPL, your purchase is split into four equal payments over four to six weeks. If paid on time, no interest is charged to the customer. So, how do BNPL providers make money? By a variety of means, actually:
Merchant fees – retailers pay a percentage of each sale to the BNPL provider
Late fees – Users get charged for late or missed repayments
Hidden interest fees – Some BNPL services charge interest on large purchases
As a consequence, BNPL providers are some of the largest and most profitable financial service companies in Australia.
Did you know? ASIC reports that 1 in 5 BNPL users struggle to make repayments. Some juggle 10 or more open BNPL accounts at once.
BNPL Now Regulated Under Australian Credit Laws
BNPL Law Changes in 2025
Hold a credit license under the National Consumer Credit Protection Act 2009
Conduct affordability checks before approving customers
Follow responsible lending guidelines
ASIC’s Role in BNPL Regulations
ASIC released Regulatory Guide 000 and Consultation Paper 382 to help BNPL providers adjust to new laws. Feedback is open until March 7, 2025.
Can BNPL Affect Your Home Loan Application?
Yes! If you plan to apply for a home loan, your BNPL spending can now be included in the assessment of your application. In fact, it is not uncommon for lenders to include the closing of BNPL accounts as a condition of loan approval.
How Lenders Assess BNPL Usage
Your repayment history – Do you pay BNPL on time?
Outstanding BNPL debt – How many accounts are open?
Credit report impact – Some BNPL providers will report missed payments to credit bureaus
Budgeting – Does your use of BNPL suggest problems with cash flow, saving or budgeting?
Fact: BNPL late payments can now impact your credit score, just like a credit card or loan default.
Is BNPL Still a Good Idea?
BNPL remains a useful tool when managed responsibly, we recommend being cautious and we welcome new BNPL lending reforms that aim to protect Australians.
If you rely on BNPL for everyday expenses, it’s time to rethink your financial habits, especially if you:
Plan to apply for a home loan
Want to refinance your mortgage
Need a personal loan or car loan
Best Financial Practices for BNPL Users
Limit active BNPL accounts – Too many accounts raise red flags for lenders
Avoid late payments – Late fees and penalties affect your budget and can impact your credit file
Monitor your credit score – Check to see if BNPL transactions appear in your credit report history
Final Thoughts: Is BNPL Worth It in 2025?
The new BNPL credit laws in Australia will protect consumers but also make BNPL harder to access:
BNPL approvals will require affordability checks
Lenders will factor BNPL spending into home loan approvals
Missed BNPL payments may affect your credit score
If you’re planning to buy a home or refinance, reducing BNPL spending will help your mortgage application.
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Are you still unsure?
If you’re still unsure of how to successfully make an offer, contact us today. We’re here to help you at every step of your property-purchasing journey.
Call us at (02) 8313-8400 or request a call back
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