The short version
- BNPL is now regulated credit, and accounts can appear on your credit report.
- Lenders read your bank statements, so frequent BNPL use shows up.
- Some lenders count your BNPL limit as debt, which reduces what you can borrow.
Afterpay's buy now pay later service is all fun and games until your home loan application gets rejected.
So can your lifestyle impact your ability to borrow funds? Can shopping with Afterpay affect a home loan decision? Let's find out.
What do banks look for?
Applying for a home loan is a multifaceted process in which lenders look at a number of factors before deciding whether or not to lend you money.
There are three crucial aspects to consider if you want to move up the property ladder.
Your credit history
Banks use your credit report to evaluate the potential risks posed by lending you money. It is a key factor when applying for a home loan, one that can make or break the deal. Lenders can use it to determine whether you qualify for a loan, and if you do, it can affect the interest rate you are eligible for.
Your credit report is held by Australia's credit reporting bodies, such as Equifax, Experian and illion. It shows your credit applications, your accounts and, for most lenders, whether you've paid on time. A clean history makes it more likely your home loan application will be approved.
Your income
Your income determines your loan affordability, with the proof of income typically including two to three months of payslips. Most lenders will also consider your savings and other assets, such as a car or other properties you might own.
Your expenses
Whilst each lender has its own rules, you may be asked to present a list of all your monthly expenses, including how much you typically spend on essentials like groceries, utilities, debt repayments, and school fees. Details of lifestyle spending such as streaming services or buy now pay later services may also be requested. To assess your loan affordability, most banks will ask for three to six months' worth of bank statements.
What effect does Afterpay have on your credit report?
Buy now pay later is now regulated as credit. Since 10 June 2025, BNPL providers like Afterpay must hold a credit licence and check that you can afford the spending limit they give you. Afterpay now runs a credit check when you open an account (and may run one before raising your limit), and each check shows up as an enquiry on your credit report. Afterpay says it does not currently report your repayment history or spending limit to credit reporting bodies.
However, this doesn't mean Afterpay can't affect the outcome of your home loan application.
Even though Afterpay doesn't currently report repayment history, you can't hide any Afterpay debt from potential lenders since they will ask for copies of bank statements that will include any Afterpay repayments.
As well as establishing what you owe, lenders can also check your repayment history when assessing your application as any late payment fees charged by Afterpay will be present on your statements. In other words, even though Afterpay don't report late payments to credit bureaus, lenders can still see them.
Missed or late Afterpay payments can affect your credibility, and the way you pay back your debt can also impact your ability to borrow. For instance, if you're using a credit card to pay back your Afterpay debt, banks may consider that a risky sign you can't manage your funds properly.
Afterpay repayments in HEM calculations
When applying for a home loan, you might be tempted to hide any unnecessary expenses. However, you won't be able to hide what you spend with Afterpay. Because the Afterpay account is linked to your card – and, ultimately, to your bank account – everything you spend through them will appear on your statements. Mortgage brokers and banks will see your Afterpay expenses. Thus, any purchases made with Afterpay will affect your HEM (Household Expenditure Measure) calculation, based on data for typical households provided by the Australian Bureau of Statistics.
Should you close your Afterpay account before applying for a home loan?
Considering that your repayments aren't currently reported and that all payments to your Afterpay account will appear on your bank statement, you don't necessarily have to close your Afterpay account before applying for a home loan.
What you should consider, however, is repay at once any Afterpay debt that's overdue, and then spend responsibly. If you want to increase your chances of being approved for a home loan, avoid late payments and use a debit card (rather than a credit card) to fund your Afterpay account.
Showing a potential lender that you can manage your money responsibly and that you always pay on time is more important than trying to hide your Afterpay account.
If your home loan application was on a knife's edge and keeping your Afterpay account open meant your home loan borrowing capacity was restricted then you might want to close it down.
At the end of the day, having a lender find out that you've hidden irresponsible activity will increase the likelihood of your application being declined.