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Changes coming to mortgage rules for Uni grads

New rules are on the cards that could soon increase the borrowing power of those with a HECS debt.

Could Changes to HECS/HELP Debt Rules Boost Your Home Loan Borrowing Power?

Good news for millions of student debt holders

If you’re one of the three million Australians carrying a HECS or HELP debt, your path to homeownership might be getting a little easier. The federal government is considering new lending rule changes that could increase your borrowing power—a welcome development in today’s red-hot property market.

The trade-off of a university degree

Tertiary education is often seen as an investment in your future career and income potential. But while a degree can open doors, it can also come with a catch: a lingering student debt that may impact your ability to secure a home loan.

 

How a HECS/HELP debt affects your borrowing power

Although a HECS/HELP debt doesn’t charge interest (unlike a typical credit card or personal loan), it’s still indexed annually—usually in line with inflation or wage growth, whichever is lower.

As of the 2024–25 financial year, repayments kick in once your income exceeds $54,435. From that point, 1% of your salary is automatically directed toward repaying the debt—and the more you earn, the higher the repayment rate climbs.

However, from a lender’s perspective, this still counts as a liability.

Why that matters when applying for a home loan

Under responsible lending laws, banks currently assess HECS/HELP in the same way they would a credit card balance or a car loan. That means it reduces your borrowing capacity—something that’s especially tough if you’re also trying to keep up with skyrocketing property prices.

 

What’s changing? Government calls for lending reform

Federal Treasurer Jim Chalmers has urged the Australian Prudential Regulation Authority (APRA) to revisit its guidance around how HECS/HELP debts are treated in loan assessments.

He’s calling for banks to exclude HECS/HELP debts from debt-to-income (DTI) calculations—effectively giving graduates more borrowing capacity when applying for a mortgage.

In his words: “People with a HECS/HELP debt should be treated fairly when they want to buy a house.”

This initiative is being welcomed by many, including the Australian Banking Association and other regulators such as ASIC, as a way to make homeownership more achievable for young Australians.

To keep updated, bookmark our blog page.

 

What this could mean for you

If you’ve been putting off buying a home because of your student debt, these changes could work in your favour. By removing HECS/HELP debt from loan serviceability checks, you might be eligible to borrow more—without making any changes to your income or spending.

At CBM Mortgages, we’re already helping clients in similar positions take the next steps towards homeownership.

Don’t wait—explore your options now

Even as lending reforms are being finalised, it’s still worth checking where you stand. We can help:

  • Assess your borrowing power
  • Understand your loan options with or without a HECS/HELP debt
  • Prepare a personalised action plan to boost your approval odds

Use our home loan calculators to estimate your mortgage repayments, or get in touch today for one-on-one guidance.

 

The bottom line: student debt shouldn’t hold you back

It’s encouraging to see policymakers and banks stepping up to address an issue affecting so many aspiring homeowners. If you’re feeling unsure whether your HECS/HELP debt is holding you back from buying a home, let’s talk.

Together, we’ll help you find the right path to property ownership—student loan or not.

 

Disclaimer: This article provides general information and should not be considered financial, legal, or tax advice. You should consult with a professional adviser to discuss your personal situation.

Written by Craig McDonald 16/06/2025