If you’re a first home buyer – or simply someone with a student loan weighing down your borrowing power – there’s some big news that could tip the scales in your favour.
Recently, one of Australia’s major banks announced a game-changing update to how it treats student loans like HECS/HELP when assessing home loan applications. In short: if your student debt is under $20,000, it may no longer be counted at all in your borrowing calculations.
Why This Matters
Traditionally, even a small student debt could reduce your borrowing capacity by tens of thousands of dollars. That’s because lenders factor your compulsory HECS repayments into your monthly commitments, which affects your ability to service a mortgage.
But under this new approach, borrowers with low-to-moderate student debt are finally getting a fairer assessment – opening the door to larger loan amounts, better property options, and improved chances of loan approval.
Real-Life Impact
Let’s say you’re earning $85,000 a year and have a $15,000 HECS debt. Previously, lenders would apply a 4% repayment rate against your income (around $3400 annually), which reduced your serviceability.
Now, with this new approach:
✅ Your student debt may be excluded entirely
✅ You could potentially borrow $30,000–$80,000 more, depending on the lender and your full financial picture
✅ This could be the difference between buying an apartment or a house – or buying at all
Bonus: Government Reforms May Reduce Your HECS Debt Too
Alongside this bank-led change, the federal government has proposed major reforms that could wipe 20% off your current student loan balance, backdated to 1 June 2023. If passed, these reforms would:
Reduce debt for over 3 million Australians
Save the average borrower around $5,000
Lift the repayment threshold from $54,000 to $67,000, easing the pressure on lower-income earners (begins 1 July 2024).
While this legislation is still awaiting final approval, it signals a strong move toward reducing the burden of student debt – especially for first home buyers looking to get into the market.
What This Means for You
If you’ve held back from applying for finance because of your HECS/HELP balance, now’s the time to review your options. With some lenders now excluding small student debts and others reassessing their approach, we’re seeing doors open for buyers who previously fell just short of their goals.
At Mynt Financial, we work with a wide panel of lenders and can help identify who will look most favourably at your situation – and who won’t. With the right strategy, that degree you worked so hard for doesn’t have to hold you back from home ownership.
Ready to See What You Could Borrow?
We’ll help you crunch the numbers, compare lender policy, and find the path forward – even if your situation is complex.
📞 Book a free, no-obligation chat with a Mynt Lending Specialist today.
🎯 Let’s find out what this new policy means for your borrowing power.
Disclaimer:
This information is general in nature and does not constitute financial or legal advice. Your personal circumstances, objectives, and financial situation should always be considered before making any decisions. Pre-approval conditions and eligibility vary by lender and are subject to change.
