Tightening criteria: Why your Afterpay balance could see your home loan application rejected

If you’re about to add another purchase to your Afterpay balance, you might want to think again. Mozo has warned Aussies against racking up massive Afterpay debt, as it could see your home loan application rejected.

“We know the big banks are cracking down on who they lend to but many people would be surprised to learn that their Afterpay balance might reduce their chances of getting a loan,” said Mozo Property Expert, Steve Jovcevski.

“The difference between getting a loan and being left out in the cold, could be the decision to delete your post pay account.”

The hidden danger of Afterpay

You might be wondering why an interest-free service, like Afterpay is causing the big banks to turn away hopeful buyers, Mozo research shows that the post-pay service could impact your credit score, that is, if you’ve linked your account to your credit card and missed a few payments.

36% of Aussies surveyed last year said that they weren’t even aware that their Afterpay usage could hurt their credit rating. So it’s no wonder homeowners are in the dark about the effect if it could have on their home loan.

How the big four banks feel about Afterpay

To banks and lenders, Afterpay is another living expense, similar to groceries and other bills, that needs to be taken into account when approving you for a loan. A bad repayment track record on Afterpay could be a red flag.

To get an understanding of where the big four stood with the post-pay service, Mozo contacted each of the big banks for statements.


Mozo reached out to Westpac for a comment on how they assessed Afterpay within their lending criteria and found that the big bank recently added 7 new assessment categories to their home loan applications, some of which included streaming services and membership fees.

A spokesperson for Westpac said, “Westpac Group takes its responsible lending obligations seriously and is committed to ensuring good outcomes for our customers.

 We recently updated our Group Credit Policies to enhance the way we capture customer living expenses, commitments, and verify documentation, with the number of our expense assessment categories captured for home loan applications changing from six to 13.”

We recognise sometimes it can be difficult for customers to provide a complete picture of their expenses and the enhancement of our expense categories means our staff and brokers have the opportunity to prompt customers to remind them about particular expenses they may have forgotten. For example, pet insurance, gym membership fees and media streaming service costs.”


A NAB spokesperson said, “NAB is committed to lending responsibly and continuing to play a key role in supporting Australians to buy their own home.

NAB’s risk appetite to lend hasn’t materially changed but like all banks, we take a more detailed approach to expense validation to make sure we continue to lend responsibly and our customers understand the potential impact of home loan repayments on their current lifestyle.

This may include spending habits such as takeaway food and clothing purchases but is not specific to any particular app or online purchasing method.

On average we are approving 80% of NAB home loans within 5 days, and this has not changed in recent times.”


A CBA Spokesperson said: “The Commonwealth Bank is committed to responsible lending and ensuring that we have a clear understanding of our customers’ financial situations.

We constantly review and monitor our home loan processes and policies to ensure we continue to meet our responsible lending obligations and do the right thing by our customers.”


Mozo reached out the ANZ for a comment and did not receive a reply.  

A buyer’s market

But despite the increase in tighter lending, first homebuyers are still persevering, now making up 18.1% of the owner-occupier market (26.8% if refinancing is excluded).

And that’s not all, in the last 12 months the average variable rate on a $400,000 loan has fallen by 3 basis points, from 4.49% to 4.46%.

“It’s clear declining property prices are presenting a good buying opportunity for first home buyers. While many in the market for a home loan in early 2018 would have been forced to sit on the sidelines, it’s a different story today,” said Jovcevski.

“Even with prices and interest rates heading south, the best way to break into the property market is to save at least a 20% deposit and stress test your ability to make repayments at different interest rate levels.”

Whether you’re about to buy your first home, looking to refinance or purchase another investment property, our home loan comparison tool can help find the right home loan for you.

Current home loan offers - last updated 23 April 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
  • Mozo Expert Choice Badge
    Express Home Loan

    Owner Occupier, Principal & Interest, LVR <90%

    interest rate
    comparison rate
    Initial monthly repayment
    6.01% p.a. variable
    6.14% p.a.

    Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

  • Flex Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR <60%

    interest rate
    comparison rate
    Initial monthly repayment
    5.99% p.a.
    fixed 3 years
    6.37% p.a.

    Competitive Fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

  • Discounted Home Value Loan

    Owner Occupier, Principal & Interest, LVR 70-80%

    interest rate
    comparison rate
    Initial monthly repayment
    6.09% p.a. variable
    6.09% p.a.

    Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).

  • Neat Home Loan

    Owner Occupier, Principal & Interest, LVR <60%

    interest rate
    comparison rate
    Initial monthly repayment
    6.14% p.a. variable
    6.16% p.a.

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.


* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.