Buy Now, Pay Later and Home Loans: What Wollongong Buyers Should Know
Buy Now, Pay Later: could it affect your home loan approval?
Buy now, pay later. It sounds convenient and harmless, right?
It’s no surprise that Buy Now, Pay Later (BNPL) services like Afterpay have surged in popularity, allowing purchases to be split into smaller, interest-free instalments when repayments are made on time. 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.
However, if you’re planning to buy a property in Wollongong or the Illawarra, recent changes to BNPL regulation mean these services could have a direct impact on your home loan approval.
What were the changes?
Previously, BNPL providers operated outside Australia’s credit laws. This meant customers could sign up quickly, often without affordability checks or a clear assessment of their ability to repay.
Over time, concerns grew about overspending and financial stress. ASIC research found:
1 in 5 BNPL users cut back on essentials like food to make repayments
1 in 6 users took out another loan to cover BNPL repayments
As a result, the Australian Government stepped in. From June 2025, BNPL providers became regulated under national credit laws.
BNPL providers must now:
Hold an Australian Credit Licence
Conduct affordability checks
Follow responsible lending obligations
Importantly, missed BNPL repayments can now appear on your credit report, similar to credit card defaults.
How does BNPL affect home loan eligibility?
When assessing a home loan application, lenders review your credit report, credit score, income and spending habits.
Missed BNPL repayments can signal financial risk and may reduce your borrowing capacity or delay approval. Even if repayments are made on time, frequent BNPL use can raise concerns for lenders, as it may indicate cash-flow pressure or reliance on short-term credit.
Occasional, well-managed BNPL use is unlikely to stop you from securing a home loan. However, ongoing reliance or missed payments could negatively affect your chances, particularly in competitive markets like Wollongong.
What should I do next?
If you’re planning a property purchase, it’s worth reviewing your BNPL habits early.
Helpful steps include:
Paying off outstanding BNPL balances
Reducing reliance on BNPL services
Closing unused BNPL accounts
Lowering BNPL credit limits where possible
It’s also a good idea to review your credit report to see how BNPL activity is recorded. You can request a free copy through:
Equifax Australia
Experian
illion
If you notice errors or outdated information, contact the credit reporting agency to have it corrected.
Like to chat with a professional?
Understanding how everyday spending habits affect your credit profile is an important step before applying for a home loan.
If you’re planning to buy your first home or upgrade in Wollongong, we can help you review your position, prepare a strong application and understand what lenders will be looking for.
When you’re ready to explore your home loan options, get in touch and we’ll guide you through the process with clarity and confidence.