‘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:
- 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
Using Klarna, or other BNPL services doesn’t necessarily mean your mortgage application will be declined. Some lenders may not worry if:
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.
The government has announced plans to make buying or selling a home cheaper and quicker with what is being called the “biggest shake-up to the homebuying system in this country’s history.”
7 days ago
Almost one in five equity release mortgages are now taken out to provide financial support to family.
9 days ago
According to industry data, the expected wait for those looking to buy a property has dropped from just over 11 months to less than six months.
It is common for your first mortgage payment to be higher than your subsequent monthly payments for two reasons.
14 days ago
Firstly, a big congratulations, you’ve now exchanged contracts! After weeks and months of waiting, you are about to move in. What should you do first?
The chancellor will deliver her second budget this autumn. Due to slow economic growth and high inflation, the government need to manage a £40 billion shortfall in public finances. There have already been reports about changes to taxes including income tax and capital gains tax.
29 Aug 2025
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.