What Australian lenders look at, whether closing Afterpay or Zip helps or hurts, and how to plan the timing
Buy Now, Pay Later has become part of everyday spending for many Australians. Afterpay, Zip, Klarna, and similar services are often used for groceries, clothing, travel, or household items. Because they feel informal and interest free, many borrowers are surprised to learn that BNPL can still matter when you apply for a home loan.
In 2026, BNPL closures before a home loan remain a common source of confusion. Some people rush to close their accounts, believing it will instantly improve borrowing power. Others leave BNPL open, assuming it is irrelevant because it is not a traditional credit card. In practice, neither approach is always right.
Many mortgage brokers in Sydney see this confusion arise not because borrowers used Afterpay or Zip, but because the timing and clean-up were misunderstood before applying.
How BNPL affects your home loan depends on how lenders assess spending, liabilities, and risk today, and how your BNPL use appears across bank statements and credit reports. Timing, patterns, and behaviour often matter more than whether an account is technically open or closed.
This guide explains how BNPL is typically assessed by Australian lenders in 2026, when closing Afterpay or Zip may help or hurt, how long BNPL history stays visible, what lenders usually expect around timing, and the most practical clean-up sequence if you are preparing for a home loan.
How Australian Lenders Assess BNPL In 2026
BNPL is not treated the same way as a credit card or personal loan, but it is also not ignored by lenders. Most Australian lenders assess BNPL through a combination of liability review, transaction analysis, and spending behaviour.
There is no single industry-wide rule. Policies vary between lenders and can change without notice. That said, there are consistent themes we see across major banks and non-bank lenders.
BNPL as a commitment rather than a limit
Unlike credit cards, BNPL products usually do not have a formal credit limit that is assessed at a notional repayment. Instead, lenders often look at BNPL as an ongoing commitment.
Depending on the lender, this may include active BNPL balances that require regular repayments, frequent BNPL transactions visible on bank statements, or multiple BNPL providers being used at the same time.
Some lenders factor BNPL repayments directly into serviceability calculations. Others treat BNPL as part of discretionary spending rather than as a standalone liability. In both cases, it can affect how much surplus income is available after expenses.
Bank statements often matter more than the account status
In 2026, many lenders continue to rely heavily on transaction history. Lenders often review the most recent three to six months of bank statements, depending on the lender and the scenario.
If BNPL repayments or transactions appear frequently during this period, lenders may include them in expense assessments, question spending habits and budgeting consistency, or apply a more conservative view of affordability.
Closing a BNPL account does not remove its appearance from recent bank statements. This is why last-minute closures rarely have the effect borrowers expect.
Credit reporting is evolving but still inconsistent
BNPL credit reporting has changed over recent years, but it is not uniform across all providers.
Some BNPL providers now report certain information to credit bureaus. Others report limited data, or only negative events such as missed payments. As a result, BNPL may or may not appear on your credit report, closed accounts may still show historically, and the absence of BNPL on a credit report does not mean it is invisible to lenders.
Lenders usually review both credit reports and bank statements as part of the assessment. BNPL does not need to appear on a credit file to be considered.
Does Closing Afterpay Or Zip Before A Home Loan Help Or Hurt
This is the question most borrowers ask, and the honest answer is that it depends on context, timing, and lender policy.
Closing BNPL is not automatically positive or negative. What matters is how the closure fits into the broader financial picture.
When closing BNPL may help
Closing Afterpay, Zip, or similar services may help in situations where BNPL is actively reducing serviceability or raising concerns.
This can include scenarios where BNPL repayments are regular and ongoing, multiple BNPL providers are being used at once, repayments materially reduce monthly surplus income, a lender treats BNPL as a fixed commitment regardless of balance, or the borrower plans to stop using BNPL entirely.
In these cases, closing the account and demonstrating a genuine change in spending behaviour over time may improve how affordability is assessed.
When closing BNPL may not help
There are also many situations where closing BNPL has little or no benefit.
This is common where BNPL use was occasional rather than consistent, the account has already been inactive for months, the closure happens immediately before application, spending patterns remain unchanged after closure, or the lender focuses more on transaction behaviour than account status.
From a lender’s perspective, closing an account without a corresponding improvement in cash flow does not materially reduce risk.
Why rushed closures can create questions
Sudden financial changes related to BNPL timing before applying for a home loan can attract attention from lenders. If a BNPL account is closed days or weeks before applying, some lenders may ask why it was closed then, whether spending has shifted elsewhere, or whether the closure is temporary.
This does not mean the application will be declined, but it may prompt follow-up questions during assessment, and the closure alone may not carry much weight.
How Long BNPL History Stays Visible To Lenders
One of the most misunderstood aspects of BNPL is visibility. Many borrowers assume that once an account is closed, it disappears. In practice, BNPL history can remain visible in different ways.
Bank statement visibility
Bank statements are usually the primary source of information about BNPL usage.
Most lenders review the most recent three months for straightforward applications and up to six months where income or expenses require closer review. BNPL transactions and repayments during this period are fully visible, even if the account is now closed.
Credit report visibility
Credit reporting depends on the provider and the credit bureau.
Possible outcomes include BNPL accounts appearing as open or closed entries, historical BNPL accounts remaining visible for years, missed payments or defaults being reported, or no BNPL data appearing at all.
Importantly, a clean credit report does not override what appears on bank statements. Lenders assess both.
Behaviour matters more than history alone
Lenders are typically more concerned with BNPL spending behaviour patterns than with isolated past usage.
Consistent BNPL use over recent months may carry more weight than an account that was used occasionally a year ago. Similarly, a closed account followed by stable post-closure spending can be viewed differently from one closed without any behavioural change.
What Lenders Usually Expect Around Timing In 2026
There is no fixed waiting period after closing BNPL before you can apply for a home loan. However, timing still matters.
Stability is a key theme
Australian lenders place a high value on stability across income, employment, and spending.
From a BNPL perspective, lenders may prefer to see reduced or ceased BNPL usage over time, consistent cash flow without reliance on short-term credit, and no new BNPL accounts opened during the application process.
How long this takes varies. Some lenders may be comfortable after a few months of stable behaviour. Others may require a longer view, particularly where borrowing capacity is tight.
Borrowing capacity scenarios are more sensitive
Where an application sits close to serviceability limits, BNPL can have a greater impact. In these cases, even modest recurring repayments can affect outcomes.
Where surplus income is strong, BNPL may have little or no practical effect, even if accounts remain open.
A Practical BNPL Clean-Up Sequence Before Applying For A Home Loan
Rather than focusing solely on closing accounts, a structured approach tends to work better.
The following sequence reflects how we typically assess BNPL readiness when reviewing a borrower’s position.
Step one: Identify all BNPL accounts
Many borrowers forget older or inactive BNPL accounts. Reviewing all providers you have used helps avoid surprises during assessment.
Step two: Review actual usage, not just balances
Look at how often BNPL appears on your bank statements, whether repayments are ongoing, and whether usage is discretionary or occasional. This provides a clearer picture than account status alone.
Step three: Clear outstanding balances where possible
Outstanding BNPL balances may be treated as commitments. Clearing balances can reduce immediate repayment obligations, depending on lender policy.
Step four: Reduce or stop usage before closing
Allowing spending behaviour to stabilise before closure is often more effective than closing first and changing behaviour later.
Step five: Avoid new BNPL during the home loan process
Opening new BNPL accounts while preparing for a mortgage can undermine earlier clean-up efforts and raise unnecessary questions.
Step six: Allow time for patterns to normalise
Even a few months of stable, BNPL-free transactions can materially change how an application is assessed, depending on the lender.
Common BNPL Mistakes Borrowers Make Before A Mortgage
We regularly see avoidable issues arise around BNPL preparation that can affect how lenders view an application, even when income and credit are otherwise sound.
Closing accounts too late
Closing BNPL accounts only days or weeks before applying rarely changes how lenders assess recent spending. Most lenders still review the transaction history that led up to the closure, particularly across the most recent bank statements.
Assuming BNPL does not count because it is interest free
Interest free does not mean impact free when it comes to home loan assessment. BNPL repayments can still reduce surplus income and influence serviceability calculations, depending on the lender.
Treating BNPL as separate from living expenses
Many lenders assess BNPL as part of discretionary or living expenses rather than as a standalone liability. This means regular BNPL use can increase assessed expenses even if balances are small or frequently cleared.
Shifting spending rather than reducing it
Replacing BNPL spending with debit card or credit card transactions without reducing overall expenses usually does not improve affordability. Lenders focus on total spending behaviour, not just the payment method used.
Opening new BNPL accounts during pre-approval
Opening new BNPL accounts during the pre-approval stage can create inconsistencies in transaction history and expense assessment. Some lenders may question why new short-term credit was taken on during the home loan process.
How Mortgage Brokers Assess BNPL In Real Applications
When we review BNPL as part of a home loan assessment, we do not look at it in isolation.
Unconditional Finance considers how BNPL fits into overall spending patterns, whether usage is ongoing or historical, how different lenders on our panel interpret BNPL, whether BNPL materially affects borrowing capacity, and the timing of any closures or changes.
Our role is not to remove every possible risk factor. It is to help present an application that aligns with lender expectations and current policy settings.
Different lenders assess BNPL differently. Some take a more conservative approach. Others apply a broader view of affordability. Understanding these differences is often more important than making blanket changes.
BNPL, Responsible Lending, And Borrower Awareness
Australian lenders operate under responsible lending obligations overseen by ASIC. These obligations require lenders to assess whether a loan is suitable based on income, expenses, and financial commitments.
BNPL usage feeds into this assessment, particularly where it indicates reliance on short-term credit, limited surplus income, or inconsistent budgeting.
Resources such as MoneySmart highlight the importance of understanding how all financial commitments affect borrowing capacity. BNPL is increasingly part of this conversation, even though it sits outside traditional credit structures.
Preparing For A Home Loan With Confidence
If you are planning to apply for a first home loan in 2026 and use or have used BNPL, the key is preparation rather than panic.
Closing Afterpay or Zip can help in some situations, but it is rarely a standalone solution. Lenders look at behaviour, consistency, and overall affordability. Allowing time for your financial position to stabilise often matters more than the act of closing an account.
If you would like to understand how BNPL may be assessed in your situation, and how different lenders might view your spending profile, our Sydney mortgage brokers at Unconditional Finance can help you compare policies and guide you through the next steps.
Disclaimer: This information is general in nature and does not take into account your objectives, financial situation, or needs. Lending criteria, policies, and assessment methods vary between lenders and may change without notice. You should consider whether this information is appropriate for your circumstances and seek independent advice where required.
Frequently Asked Questions (FAQs)
A broker can review your transaction history and explain how different lenders may view BNPL usage. Unconditional Finance may do this as part of an early review to help you understand timing and policy differences before applying.
Yes, treatment can vary depending on the lender and the BNPL provider. Some lenders may assess frequent use across multiple providers more conservatively than limited use with one provider.
Having multiple BNPL accounts can sometimes raise concerns about reliance on short-term credit. Some lenders may view several active BNPL facilities as higher risk than a single, lightly used account.
It can, depending on how the lender assesses expenses and surplus income. Even with high income, regular BNPL repayments may still reduce assessed borrowing capacity in some scenarios.
The assessment approach is generally similar, but context matters. First home buyers are often assessed more closely on spending patterns, while refinancers may be reviewed against existing repayment history and overall affordability.
Many lenders prefer to see stable spending in the months leading up to an application. Reducing or avoiding new BNPL use during this period may help present a more consistent financial picture, depending on the lender.
Even if you have never missed a BNPL payment, lenders may still consider the repayments as part of your overall expenses. Some lenders focus more on ongoing spending behaviour than repayment history alone.