Klarna is a Buy Now, Pay Later (BNPL) service. It lets you split purchases into short-term instalments, sometimes interest free. BNPL uses may be reported to credit agencies and will show on your bank statements, so lenders can treat the instalments like regular monthly costs.
Buy Now Pay Later services, like Klarna are common, especially when you are setting up a home. If Klarna appears on your credit file or bank statements, it’s very normal to worry about your mortgage chances and we see it all the time. You CAN get a mortgage, but when they are used occasionally and paid on time.
That is usually fine, however, frequent use or missed payments will lower your borrowing power.
In this guide we explain, in plain English, how lenders view Klarna, what it means for affordability and simple steps to get mortgage ready. Our CeMAP-qualified, FCA-regulated advisers help first time buyers, homeowners and customers with past credit issues every day; and we are here to help you too.
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Quick summary
- Klarna and other BNPL can appear on your credit file and bank statements. Lenders do look consider both.
- Occasionally, well managed BNPL is usually fine. Persistent use or missed payments can reduce borrowing power.
- Missed or late BNPL payments can harm your score with Credit Reference Agencies (CRAs).
- Multiple recent BNPL accounts may trigger closer affordability checks and lower Loan to Value (LTV) tolerance.
- You can still get a mortgage with Klarna on your file. Tidying usage and evidencing good conduct helps.
- The Mortgage Broker can match you to lenders that are more flexible on BNPL behaviour.
Good to know: A Mortgage in Principle (MIP) is a soft indication of what a lender may lend, based on a snapshot of your credit file and affordability. It is an excellent indication, but not a guarantee.
Does Klarna affect a mortgage application?
Short answer: Yes, it can. Lenders assess your credit file and recent bank statements. Klarna may show as a credit agreement or as instalment payments leaving your account. If you use BNPL occasionally and pay on time, many lenders are relaxed. Heavy or frequent use, high outstanding balances or any late payments can reduce the amount you can borrow or lead some lenders to say no.
Mortgage underwriters look at four things:
- How often you use BNPL
- Whether payments are made on time
- The size of instalments alongside other commitments
- Recency – when did these occur. Lots in the last few months can be a red flag.
With higher Loan to Value (LTV) ratios, the tolerance for BNPL is much tighter.
Loan to Value: Loan to Value is the percentage of a property’s price you are borrowing as a mortgage.
Example: £240,000 mortgage on a £300,000 home = 80% LTV (you have put down a 20% deposit).
Why it matters: Lower LTV (bigger deposit) usually means more lender choice and lower interest rates. Higher LTV (smaller deposit) can mean stricter criteria and higher rates.
Mortgage Lenders set product bands (for example 60%, 75%, 80%, 85%, 90%, 95% LTV). Moving down a band can improve the deal you are offered.
Where Klarna is generally fine for a Mortgage from the outset – Green Flags
- No missed payments
- Low or Zero BNPL balances
- No new BNPL in the last 3-6 months
- Tidy bank statements
- Stable income
Can I still get a mortgage if I’ve missed Klarna payments?
Usually, yes with the right lender. Options narrow if there are late BNPL markers, but specialist lenders may consider you if everything is now up to date and the rest of your profile is strong. Be ready to explain what happened, show recent good conduct and demonstrate that your budget comfortably covers the proposed mortgage. Mortgage Broker’s will help you present all of this to the lender.
Quick wins before you apply:
- Bring any BNPL accounts fully up to date and avoid new plans.
- Keep three months of clean bank statements (no unarranged overdrafts or gambling).
- Maintain all other credit agreements on time.
- Check your multi agency credit file for accuracy and BNPL markers. You can view this with our partner: CheckMyFile –this is a free 30 day trial – you MUST cancel before the 30 days to not be charged.
- Speak to a broker early so we can steer you to the most suitable lenders.
How to get “BNPL-ready” for a mortgage
Start 3–6 months out if you can. Clear or reduce BNPL balances, pause new BNPL, and build a small buffer in your account so statements look stable. Underwriters like to see predictable income, regular savings, and controlled spending. We’ll assess your position, suggest quick fixes and secure a Mortgage in Principle (MIP) so you know where you stand.
FAQs: Klarna Frequently Asked Questions.
Does Klarna always show on my credit report?
Not always. Some BNPL agreements are reported to Credit Reference Agencies (CRAs) and some are not. Lenders also review your bank statements, so BNPL use can still be considered even if it doesn’t appear on the report.
Is Klarna a soft or hard search?
Klarna may use a soft search for eligibility and a separate agreement can be reported if credit is granted. Soft searches do not affect your score, but any active BNPL repayments will still be visible on statements and counted in affordability.
Should I close my Klarna account before I apply?
You don’t have to close it, but pausing usage and clearing balances for at least three months can help. If you do close it, we will allow time for your credit file to update before applying.
Conclusion
If you are worried that Klarna or other Buy Now Pay Later will affect your mortgage, then hopefully this has helped you. However, please feel free to contact The Mortgage Broker anytime, for free no obligation and impartial advice.
Our advisers can help you get mortgage ready, and are on hand to help anyone rebuild credit. The Mortgage Broker has access to over 130 mortgage lenders, and our qualified advisers are specialists across many complex scenarios. We see hundreds of applicants with Klarna and other lines of credit, so we are extremely well versed in presenting mortgage applications in the most positive way possible to give you every chance of mortgage success.
The Mortgage Broker
The Mortgage Broker provides friendly, no nonsense advice from CeMAP qualified, FCA regulated advisers. We compare 130+ UK lenders and 25,000 products to help you find a suitable mortgage based on your needs and budget. We specialise in first time buyers, bad credit, complex income and remortgages. Trusted by customers across the UK with 2,500+ five star Trustpilot reviews and 5 out of 5 on Google. GDPR secure and transparent from start to finish.
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