Bad news for Afterpay users

This week, two Australian banks informed brokers that customers’ use of BNPL would specifically be taken into account when considering their ability to pay back a loan.

Macquarie Bank introduced the new rule on Monday while The Australian reported this also came into effect for ING customers this week.

A Macquarie Bank spokesperson confirmed to news.com.au that someone applying for a loan would now have to declare their BNPL limit, as well as their current balance and monthly repayment.

ING has introduced a similar policy, which they said was in line with new requirements from the Australian Prudential Regulation Authority (APRA).

News.com.au understands some of the other big banks have already been assessing BNPL to comply with the new regulations since they were announced in June.

Macquarie Bank sent a message to all their brokers informing them of the change.

“We’re updating our credit policy to include ‘buy now pay later’ (BNPL) commitments in our debt-to-income ratio and serviceability calculations,” part of the emailed note read.

BNPL will now be included in Macquarie’s serviceability calculator.

The change began from Monday, December 19. However, there will be a grace period until January 3.

After then, new applications submitted must use the new serviceability calculator.

As for ING, a spokeswoman confirmed to news.com.au that they had introduced a BNPL transaction as a debt when assessing a loan application but wouldn’t go into their specific policy.

According to The Australian, BNPL debts that are being paid back through instalments will be treated as a personal loan, where the amount left to pay and the total monthly amount is taken into consideration.

If it’s a more short term loan, it can be paid off and then won’t be factored into a customer’s borrowing capacity.

The spokeswoman added to news.com.au: “We’ve always taken a prudent approach to lending and consider that the policy changes are designed to support customers in meeting their repayment obligations.

“We don’t anticipate it will have a material impact on approvals.”

It comes after eight consecutive months of Australia’s central bank hiking the official cash rate, drastically reducing the borrowing capacity of aspiring homeowners.