28 Apr 2025
The Impact of Klarna on Mortgage Applications
‘Buy Now, Pay Later’ (BNPL) schemes, such as ‘Klarna’ are short-term loans that allow shoppers to make a purchase, but delay paying for it for an agreed amount of time.
Klarna is one of the most popular BNPL services with 18 million customers in the UK alone, and offers interest-free payment options which is appealing to shoppers. However, does it affect a mortgage application?
Will using a BNPL service prevent me from getting a mortgage?
Not necessarily. However, it can impact how lenders look at your mortgage application as per the below:
- Extra assessment - there are some lenders that will think you are taking out a BNPL loan to pay for your everyday expenses, and therefore see Klarna as a negative. It doesn't necessarily mean that the application won't go through, but you may get asked more questions
-
- Missed payments/bounced direct debits – this is the biggest issue for lenders. These will show on your credit report and make lenders question whether you can afford a mortgage payment
-
- Debt to Income Ratio (DTI) – if your monthly outgoings are being bumped up due to Klarna payments, this could potentially increase your DTI, making it more difficult to borrow more
-
- Affordability checks – continuous Klarna payments could be seen as set expenses, which could mean a drop in how much you are able to borrow
- Credit checks - every time you apply for a Klarna account, you have a credit check applied to your credit file. If you have a lot of credit checks on your file this can look like a reliance on credit to cover your monthly expenditure
Using Klarna, or other BNPL services doesn’t necessarily mean your mortgage application will be declined. Some lenders may not worry if:
- You've only borrowed a small amount
- You've only used it once and paid it off in full
- You've never missed a payment
- You'll pay off the debt before getting the mortgage
If you have used Klarna or other BNPL services and want to apply for a mortgage but are worried about how it will affect your application, give the team at Mortgage Required a call. We will look at your circumstances, and help you to find the best option for you: 01628 507477.
Recent posts
The chancellor has advised that landlords could have another tax to pay this autumn as the Treasury decide whether to extend national insurance contributions to rental income.
According to a report in the Guardian, senior ministers have asked Treasury officials to look into a “proportional” property tax to see how it would work as an alternative to the existing stamp duty land tax on owner-occupied homes.
More than a quarter of UK adults in long-term relationships (26%) have reported that despite living together, they keep their finances separate from one another.
There has been a rise in both rent and mortgage costs over the last three years, with renters seeing a greater increase in their monthly payments than those with a mortgaged property.
Delayed Start Mortgages
23 days ago
The new Delayed Start Mortgage launched by Skipton Building Society allows first time buyers to postpone the first three mortgage payments. This product has been designed to help soften the blow of moving in costs for first time buyers.
Green Mortgages | Rewards and Benefits
25 days ago
Mortgage lenders are starting to recognise their “Green” responsibilities when it comes to the different products they offer.
A recent study by Boon Brokers where 1,000 people who had used an estate agent over the last year were surveyed, showed that a whopping 52% said they were pressured into using the estate agents’ in-house mortgage broker.
When will mortgage rates fall further?
25 Jul 2025
Analysts are predicting further rate cuts this year, with the next one possibly coming down to 4% when the Bank of England’s Monetary Policy Committee meet on Thursday 7th August 2025.
More information
Trusted by
