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Does using Monzo Flex affect mortgages?

Satnam Sidhu - Mortgage Expert 7th July 2022

Last year, Monzo became the first major bank to launch its own buy now, pay later (BNPL) scheme. ‘Monzo Flex’ enables its current account customers to make interest-free repayments in three instalments over three months on purchases worth between £30 and £3,000. 

But with other BNPL services such as Klarna reporting transactions to credit agencies, will using it impact your chances of getting a mortgage?

What is Monzo Flex?

Monzo Flex is a Buy Now Pay Later scheme that allows the bank’s customers to pay for things in three monthly interest-free instalments. If customers need longer to pay, they can pay over 6-12 months at a 19% interest rate.  

Monzo Flex can be used on all types of payments, and customers can also go back over the previous two weeks and choose to spread out payments on any past purchases. 

Like Klarna, late payments will be reported to the credit reference agencies and are likely to harm your credit rating. If you’re late consistently, your credit limit may be reduced and your debt could be passed on to a debt recovery agency. Read more about how late payments affect your credit score

Will using Monzo Flex affect my mortgage? 

Mortgage lenders will look at your credit history when deciding whether to give you a mortgage. Any payments you’ve missed on loans, credit cards, or BNPL purchases will  show up on your credit report

On the flipside, if you’ve borrowed responsibly and made all your Monzo Flex repayments, then it actually has the potential to improve your credit score. It’s important to be mindful of your borrowing and on top of repayments as much as you can, so it doesn’t put your chances of getting a mortgage at risk. 

When you have bad credit, you're considered riskier than other borrowers. That’s why it’s more difficult to get a mortgage, especially from the mainstream banks and high street mortgage providers. If you have more severe credit issues such as CCJs or bankruptcy, then you’ll probably get turned down flat. But just because the big banks say “no”, doesn’t mean it’ll be no from everyone. 

Bad credit? Doesn’t mean you can’t get a mortgage 

If your credit score has taken a hit after a missed BNPL payment, it’s not game over when it comes to mortgage time. There’s a whole market out there dedicated to lending to people who wouldn’t qualify for a mortgage on the high street. We call them specialist lenders. 

Specialist mortgage lenders are regulated in exactly the same way as the high street banks, and act as a bridge to help you onto the property ladder now, rather than having to wait until the blips drop off your credit file. Not everyone has the option of waiting for their credit score to improve, which is why specialist lenders provide that opportunity to build a roadmap back to the high street, and get you on the property ladder sooner. 

Specialist lenders require carefully crafted applications, which is why you can only get access to most of them by working with a specialist bad credit mortgage broker - like us! Working with Haysto will not only give you access to lenders you wouldn't have on your own, but our Mortgage Experts also have great relationships with them. They’ll know which mortgage fits your needs and can put together a fab application. Make an enquiry and one of our Mortgage Experts will call you back to talk through your options. 


Our Mortgage Experts are fully-qualified with experience in bad credit, self-employed and complex mortgages. They have a proven track record of getting mortgages for people who’ve been rejected elsewhere.

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