The change comes into affect next monthRory Poulter12:29, 10 Jun 2026Millions of shoppers will see a big change next month. Customers who use buy now, pay later services such as PayPal, Klarna and Clearpay will gain stronger legal protections under a major regulatory shake-up.‌From July 15, firms offering buy now, pay later (BNPL) products will come under the supervision of the UK's financial watchdog, meaning lenders will have to carry out affordability checks and provide clearer information about the risks of borrowing. The changes are designed to tackle concerns that some consumers are taking on debt without fully understanding the consequences, while industry experts say the move could also affect borrowers hoping to secure a mortgage.‌Under the new rules, BNPL providers will be required to tell customers how much they are borrowing, when repayments are due, the size of any late-payment penalties and what rights and protections they have. Lenders will also have to carry out affordability assessments before offering credit and provide support to customers who miss repayments.‌Mortgage brokers welcomed the long-awaited reforms, warning that many consumers do not view BNPL as a form of borrowing despite its potential impact on their finances. Darani Ganesharajah, mortgage broker at Springtide Capital, said: "People using BNPL often overlook the fact that they are borrowing money, which can be a blow to their buying ambitions when it comes to applying for a mortgage. Hopefully, the sector being regulated will make people think more about what they are entering into and the risks involved."She warned that some borrowers fail to disclose BNPL commitments during mortgage applications because they do not see them as debts. Ms Ganesharajah added: "Borrowers will sometimes forget to disclose them or simply not consider them relevant when discussing their finances. This can create issues later in the mortgage process when lenders identify the commitments through bank statements or credit checks. In some cases, it can lead to reduced borrowing capacity, declined Decisions in Principle, additional credit searches, requests for further documentation and delays to applications.‌She said greater transparency could ultimately benefit both consumers and lenders. Thomas Boughton, founder of Artillium Real Estate Finance, told Newspage the changes were "long overdue".He said: "Consumers have increasingly been entering into largely unregulated, instant credit agreements without fully understanding the risks or long-term financial impact." Mr Boughton said mortgage lenders often take a cautious view of BNPL borrowing, even where repayments are maintained.‌"From an advisory standpoint, we advise against any BNPL usage," he said. "It is often used for discretionary purchases such as clothing or footwear and frequent use can be a red flag in mortgage assessments. From a lender's point of view, if you have to finance a pair of shoes, it probably isn't the right time to look at mortgage options and that is the reality.”'Heavy use of BNPL could still count against borrowers'Nouran Moustafa, practice principal and IFA at Roxton Wealth, said the key issue for lenders is how often customers use BNPL products. She said: "Mortgage lenders don't usually treat BNPL as automatically bad, but they do look at the pattern. Occasional BNPL use that is repaid on time is very different from someone constantly splitting small everyday purchases because cash flow is tight."She added that while regulation should make BNPL products more transparent, heavy use could still count against borrowers. "My view is simple: regulation is good for consumers, but borrowers should not confuse regulated with harmless," she said.Article continues belowHarry Goodliffe, director at HTG Mortgages, agreed that borrowing habits remain crucial. "The issue has never really been Buy Now Pay Later itself, but how it's used," he said. "Someone occasionally spreading the cost of a purchase is very different from someone relying on BNPL for everyday spending.”Samuel Mather-Holgate, managing director at Mather and Murray Financial, said the new regime would make consumers think more carefully about the implications of using the products. He added: "Without doubt, the new regime will make consumers more aware of what they are doing and the potential implications of it on their credit score."The reforms represent the biggest overhaul of the BNPL market since the payment option exploded in popularity, with millions of Britons using services from Klarna, Clearpay and PayPal to spread the cost of purchases.