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
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- 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
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- 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
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- 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.
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