With Christmas shopping in full swing, new data from broker Mojo Mortgages reveals that the seemingly convenient Buy Now, Pay Later (BNPL) payment option could jeopardise your chances of buying a home in 2025.
BNPL usage soars by 80% during Christmas
Research shows that over half (56%) of consumers use credit for Christmas purchases, with BNPL spending increasing by nearly 80% compared to previous weeks. This spike raises concerns about accumulating short-term debts that could impact mortgage eligibility.
John Fraser-Tucker, Head of Mortgages at Mojo Mortgages, cautions against this trend: “While BNPL can feel like a helpful tool during the holiday rush, these small commitments can escalate into larger financial challenges. If you’re hoping to buy a home in 2025, now is the time to be cautious.”
The average shopper could buy up to £1,287 worth of Christmas presents using BNPL methods
After analysing the top 100 trending Christmas presents, Mojo Mortgages has uncovered some concerning statistics:
- A staggering 89% of the top 100 trending presents can be purchased through BNPL methods.
- 75% of these products actively promote BNPL options on their product pages, enticing shoppers to use the credit method.
- The average gift costs £128.76.
- The average person buys 6-10 presents, therefore, a typical shopper could accumulate between £772.56 and £1,287.60 in BNPL commitments this season.
1 in 2 BNPL users have missed a payment – which could derail your house-buying plans in 2025
Nearly half (48%) of BNPL users have missed at least one payment, with 47% incurring extra fees.
John Fraser-Tucker explains, “Missing a BNPL payment isn’t just bad news for your bank account—it can mess with your debt-to-income ratio and overall creditworthiness, two things mortgage lenders assess when you’re applying for a mortgage.”
However, even timely payments can raise red flags. John Fraser-Tucker advises, “Lenders are wary of multiple credit commitments. They may see it as a sign you’re stretching yourself thin financially, potentially affecting your ability to keep up with mortgage payments.”
He adds, “Whilst BNPL isn’t a new concern for lenders, the market is expected to grow to £40 billion by 2026—accounting for 10% of all e-commerce spending. Due to this rapid growth, we’re witnessing more lenders incorporate detailed BNPL checks into their standard underwriting processes. As this market expands, expect these assessments to become even more thorough.
Advice for aspiring homeowners
If you’re planning to buy a home in 2025, John Fraser-Tucker has some straightforward advice: “Be mindful about how you approach holiday spending. Instead of relying on BNPL, consider setting a strict budget and using cash or debit cards to avoid taking on new credit commitments.
“If you can’t afford to buy a present outright, don’t feel pressured to do so. Your friends and family will understand your situation if you’re saving for a house. The important thing is to prioritise your financial health now so you can enjoy homeownership later.”