Apple's iPhone leasing program: How it works, what to consider

Personal Finance / Banking Some offers on this page are from advertisers who pay us, which may affect which products we write about, but not our recommendations. See our Advertiser Disclosure . Apple's iPhone leasing program: How it works, what to consider Hal Bundrick, CFP® · Senior Writer Fri, July 31, 2026 at 4:31 PM GMT+2 5 min read An iPhone for $17.

99 a month or an Apple Watch for $11. 99 a month may sound like a deal too good to pass up. Apple's new Apple Upgrade program offers appealing, low monthly payments on Apple devices, so affordable in fact that some consumers may be asking, "What's the catch?

" Here's how the new Apple ( AAPL ) payment program works, and what experts say to consider before jumping in.   Also read: Best high-yield savings accounts: Earn up to 4. 10% APY How the Apple Upgrade program works Apple Upgrade is a hardware-leasing agreement that replaces the old purchase program.

Consumers can obtain iPhones and other Apple products with a 12- or 24-month lease online, in the app, or at Apple Stores in the U. S. Apple Watches have a 24- and 36-month lease option.

Payments can be reduced by the value of an Apple device trade-in. The lease program is facilitated by Klarna ( KLAR ), the buy-now-pay-later company, which takes a credit application with a soft credit pull that doesn't impact your credit score.   Entry-level Apple products such as the iPhone 16, iPhone 16 Plus, Apple Watch SE, MacBook Neo, Mac mini, iPad (A16), and Studio Display are not available through the Apple Upgrade program.

Read more: Is buy now, pay later helping or hurting your budget? Apple Upgrade leasing terms Apple provides this example of a lease arrangement on an iPhone 17 Pro 256GB with a purchase price of $1,099: The typical monthly payment would be $31. 99 for a 24-month lease term and $45.

99 for a 12-month lease term. All prices exclude taxes and any trade-in credit and do not include an AppleCare (device insurance) subscription. In the 24-month lease example, the payments would total $767.

76. To buy the phone at the end of the lease, a one-time residual payment of $331. 24 for the balance remaining on the original purchase price would be required.

So, $1,099 - $767. 76 = $331. 24, again excluding taxes and any trade-in credit.

Apple says you won't pay more than the phone's original list price when leasing it. What happens at the end of the lease? At the end of the lease term, customers can purchase their device with a one-time payment (see the sample calculation above), upgrade to another, or return it.

Can an Apple Upgrade lease be canceled? Yes, but Apple says "you may incur substantial fees if you terminate your lease before the end of your initial lease term. " Is a carrier plan required?

Yes, a carrier option is required at checkout; however, you can switch service providers at any time, subject to carrier restrictions. Prepaid carrier plans are not accepted. How to get 0% financing If purchasing a device better suits your financial goals — and you're willing to carry one more credit card — there is another 0% financing option.

The Apple Card offers monthly installment payments with no interest charges, subject to credit approval and credit limit. You can also receive 3% cash back when using an Apple Card. Read more: Apple card review: Ideal for Apple fans who want to save on tech purchases How Apple Upgrade differs from the former iPhone Upgrade program Many consumers may be confused by the new leasing program, because Apple has long financed iPhones with a down payment followed by monthly payments.

At the end of the monthly commitment, consumers owned their phones. That was the old "Apple Upgrade Program," which is being discontinued; however, existing customers will continue making the same payment until their device is paid off. Carriers, such as AT&T and Verizon, also finance iPhones, so that's another option to compare.

On social media , one consumer said he purchased an iPhone 17 Pro for $65. 33 per month with the old Apple installment program, which included AppleCare+ protection.   "For the same phone, the 12-month lease is $54.

36 + $13. 99 a month for AppleCare+, so $69. 35 a month if I want to stay on an 'annual upgrade' cadence.

Slightly more expensive," he noted. He may not have considered the down payment for the purchase plan and the residual payment following the lease, though. Payment options offered in an Apple screenshot published by 9to5Mac also showed minor differences in cost.

Read more: Everything you need to know about the Apple Savings account What to consider when leasing technology Apple Upgrade may appeal to consumers who want to update their tech frequently and prefer lower monthly payments over ownership. You get a low payment that doesn't equal the retail list price, and you can trade up every year or two. However, there may be a better option if you weigh the financial considerations.

"As with most big purchases, it's always best to buy outright if you can afford it," Thad Hwang, founder and CEO of Goji Mobile , told Yahoo Finance. "That said, many people don't have a spare $1,000 or more lying around to buy a phone outright. Major carriers have offered similar lease-to-own options for years, but Apple's is unique with the no money down, 0% financing, and lump-sum final payment.

" Hwang also likes the 0% financing available with the Apple Card. Stoy Hall, a certified financial planner® in Iowa, said leasing technology is not automatically a bad decision, but lower payments aren't the only consideration. "The biggest problem is not one $32 or $42 payment, it's what happens when that gets stacked on top of the car payment, streaming services, buy-now-pay-later purchases, credit cards, and every other 'small' monthly charge people barely notice," Hall said.

For most people, the better financial move is to buy a device you can actually afford and keep it longer, he added. Read More Is it better to lease or finance a car? Here’s how to decide.

Learn about the pros and cons of leasing versus financing a car, as well as the insurance requirements for each. Apple Card review: Ideal for Apple fans who want to save on tech purchases The Apple Card doesn't charge annual fees, transaction fees, or penalties, and users can earn daily cash back on their purchases. Buy now, pay later vs.

credit cards: Which should you use for your next purchase? Everything you need to know about buy now, pay later services, credit card payment plan alternatives, and how BNPL affects your credit. New car payments just hit a record high.

Here's what you should be spending. Longer loan terms, buyers paying $1,000 or more a month for a vehicle than ever before, and higher insurance costs — buying a new car may be reaching the limits of affordability. Upgrade review (2026): A leading fintech that offers high yields and few fees Although Upgrade isn't a bank, it offers some of the best banking products on the market today.

Should you bank with Upgrade? Find out in this in-depth expert review. Is buy now, pay later helping or hurting your budget?

Buy now, pay later usage is expected to increase this year. Here's what to know about BNPL, along with some alternatives to consider.