The Apple Upgrade Program leasing arrangement launched on 28 July 2026, with iPhones available from $17.99 per month and a Klarna-powered structure that is a true lease, not a loan, and the distinction matters more than the low monthly figure suggests.
Apple partnered with Klarna, the buy-now-pay-later fintech, to replace the old iPhone Upgrade Program previously run by Citizens One Bank. The new programme covers iPhones, iPads, Macs, and Apple Watches, with 24- or 36-month terms for most devices. According to the Klarna press release on the partnership, 12-month terms are also available for iPhone and Apple Watch, extending the options beyond what Apple’s own marketing materials have emphasised.
Apple Upgrade Program leasing costs: what the numbers show
The Apple Newsroom launch announcement lists Apple Watch leases from $11.99 per month and iPhone leases from $17.99 per month at the entry level. Higher-specification models run higher: an iPhone 17 Pro starts at $32 per month on a 24-month term, bringing total payments over two years to $768 against a device price of $1,100. At the end of that term, you have handed back 70% of the device’s cost and still do not own it.
Keeping the device means paying the outstanding balance. Apple’s terms cap this purchase fee at the full retail price at lease signing minus all payments already made. For the iPhone 17 Pro example, that is roughly $332 remaining. For a MacBook Pro at $39 per month over 36 months, total payments reach $1,404 against a $2,000 purchase price, leaving around $596 to buy the machine outright after three years of paying.
The alternative comparison is instructive. Financing the same iPhone 17 Pro on Apple Card at 0% interest runs around $46 per month over 24 months. After two years, you own the phone, can sell it, trade it in, or keep it. The Apple Upgrade Program leasing route costs $14 less each month but leaves you with nothing unless you pay the residual balance.
Upgrading at the natural end of a lease term costs nothing extra, per Apple’s programme details. Upgrading early is a different matter: you pay the full sum of remaining lease payments plus applicable taxes as a lump sum before starting a new lease.
The six-month inaction clause and trade-in offset
A clause buried in Apple’s programme terms deserves careful reading. According to Apple’s programme details, if a lessee takes no action within six months after the lease term ends, Klarna will automatically charge the full device price at lease signing, minus total payments made and any remaining trade-in credits. That is an unintended automatic purchase if the return window quietly passes. Returning the device or starting a new lease before that six-month deadline closes avoids the charge.
On the positive side, the same Klarna press release confirms that customers can trade in an existing device when enrolling, reducing monthly payments during the initial lease term. That trade-in credit partially offsets what is otherwise a structurally expensive way to access hardware.
Who the programme suits, and who it does not
Eligibility requires US residency, a minimum age of 18, an accepted credit or debit card, and an Apple Account, per Apple’s eligibility terms. iPhone lessees must also select an eligible postpaid carrier; prepaid carrier plans are not accepted.
Under Apple’s privacy documentation for the programme, WebBank is identified as Klarna’s bank partner for loan offerings. Applicants’ name, birth date, email address, billing address, and device phone number are shared with Klarna or WebBank for identity verification and fraud prevention. The programme triggers a soft credit inquiry, not a hard pull.
Klarna’s interest in the arrangement is straightforward. The company’s investor message confirmed it expects Apple Upgrade Program leasing to contribute positively to its Adjusted Operating Income in 2026 and across the life of the arrangement. As confirmed in the Klarna investor message, Klarna finances the consumer’s purchase, earns a financing return on scheduled repayments, and carries the receivable at fair value on its balance sheet. As of the first quarter of 2026, approximately 90% of Klarna’s balance sheet was deposit-financed.
The programme will not save money for someone hoping to keep a device long-term. The monthly payment is lower than financing, but by the time the term ends you have paid the bulk of the device’s value and still need to find the residual to own it outright. For a serial upgrader who returns the device in good condition and starts a fresh lease, the lower monthly outlay is a genuine benefit. For anyone else, standard 0% financing delivers more value.
Apple Watch and iPhone lessees now have 12-, or 24-month term choices; how Apple prices residuals on annual refresh cycles will determine whether that shorter option becomes the programme’s most popular path.