How Afterpay and Zip are killing home loans
Finance, real estate experts, and buyers' advocates have sounded the alarm on a hidden world of 'silent black-listing', where hopeful homebuyers are knocked back by banks with no explanation, despite strong incomes and even formal pre-approvals.
And you might already be on the list.
Ray White AKG principal Avi Khan said he's seen an alarming rise in finance knock-backs over issues buyers never saw coming.
'It's particularly affecting people using buy-now-pay-later services like Afterpay and Zip,' Mr Khan said.
'Any mispayment — even one missed $40 repayment — is enough to raise red flags with the banks.
'Most borrowers have no idea they're being monitored at that level.'
While many buyers assume their credit score is all that matters, Mr Khan said banks are digging deeper, and judging harshly.
'People think if they pass the online mortgage calculator, they're good to go,' he said.
'But banks apply a strict stress test those calculators don't factor in.
'So they enter the market with false confidence, and when finance is declined, they're devastated.'
Melbourne buyers' advocate and expert in buyer psychology Cate Bakos said she's heard of buyers penalised over spending that feels minor, but looks messy on paper.
'Those services can have a significant impact,' Ms Bakos said.
'And it's not just buy-now-pay-later platforms. If a lender sees cash being pulled out at a casino, that's not a good look.
'Even your subscriptions and payment services show up in your statements — and that can absolutely affect how the banks view you.'
Ms Bakos said lenders are trained to spot risk, even if the borrower doesn't see it.
'You've got to think like an assessor. What do your statements say about you? That's what the bank is judging,' she said.
Cohen Handler Victoria managing director Nicole Jacobs said even buyers with solid savings can be left reeling when banks reassess borrowing limits without warning.
'It can be absolutely devastating,' Ms Jacobs said.
'If you've been looking at properties in a certain price bracket, and then you're suddenly told your spending habits or credit conduct have precluded you from buying in that range, it feels like the rug has been pulled out from under you.'
Ms Jacobs warned that lifestyle spending — even brunches or Afterpay splurges — can quietly erode borrowing power.
'Understand that borrowing isn't about how much you've saved — it's about what you can repay,' she said.
'Even with a great job, the background spending can hurt you.
'Being in a position to buy a home is far more valuable than another handbag or a few nice extras.'
Finch Financial chief executive and mortgage expert Julian Finch said while there's no official blacklist, it doesn't mean you're not being flagged.
'If you've defaulted, had a loan declined, or behaved in a way that raises red flags, that information doesn't disappear,' Mr Finch said.
'It sits in the bank's internal systems and can stop you getting a loan — not just with them, but potentially with other lenders too.'
Mr Finch said defaults, dishonoured payments, overdrawn accounts and too many applications in a short time can all quietly trigger a silent no, especially when banks are assessing repayment risk.
'Banks monitor conduct,' he said.
'Even if your credit score is intact, poor account behaviour can sabotage your application from inside the bank's risk systems.'
The Finch Financial Finder said certain occupations — especially those with casual or unstable income — can also prompt concern, regardless of salary.
Mr Finch urged buyers to get a proper credit-assessed pre-approval before shopping — and to avoid applying to multiple lenders in desperation.
'Work with a finance expert who understands how banks think,' he said.
'We can match you with lenders who are suited to your situation and help avoid unnecessary hits to your credit file.'
'I can't say too much just yet, but there's certainly more activity to come.'
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