If you're going for a home loan but still have a HECS debt, you might want to wait
The Advertiser20-06-2025
People with outstanding student loans will have an easier time getting a mortgage from September, when new lending rules will take effect.
Banks will be able to disregard higher education loan program (HELP) debts, which include HECS debt, when assessing a homebuyer for a mortgage.
The changes were finalised this week, after the Albanese government made a pre-election pledge in February to level the playing field for people with student debts.
The Australian Prudential Regulation Authority has advised banks to remove HELP debt from debt-to-income reporting, a metric used to determine a person's capacity to repay a mortgage.
The regulator has also clarified that it may be reasonable for banks to completely disregard a person's HELP debt from serviceability assessments, where it's expected the loan will be paid off within 12 months.
Treasurer Jim Chalmers said the changes would make lending rules fairer.
"We're making sure young people with a HELP debt are treated fairly and supporting them to get into the property market," he said.
The changes mean a dual-income household with two student debts could borrow an additional $50,000 in the year they expect to pay off their student loan, according to the government's own analysis.
APRA has written to lenders and the industry to advise them of the changes and their new obligations.
The revised standards for banks will come into effect on September 30, 2025.
In its letter to lenders, APRA said the changes would provide regulatory clarity and reaffirm the flexibility banks had in considering borrowers' individual circumstances.
The regulator expects the changes will allow some borrowers with student debts to secure a home loan sooner.
Education Minister Jason Clare said the Universities Accord found that banks' assessments of student debt made it harder for young Australians to buy a home.
"HECS was never meant to be a handbrake on owning a home," he said.
"That's not fair and we're fixing it."
The federal government will also move ahead with its plan to reduce student debts by 20 per cent, something it committed to before the May election.
During the election campaign, Prime Minister Anthony Albanese promised the legislative changes would be his first priority if his government was to be re-elected.
The government has reaffirmed this, saying it will be the first piece of legislation introduced when Parliament returns on July 22, 2025.
The 20 per cent reduction will occur once the legislation passes Parliament. However, the government has clarified the discount will be calculated based on a person's HELP debt amount as at June 1, 2025, before indexation was applied.
This means the 2025 indexation will only apply to the remaining balance after the 20 per cent reduction.
People with outstanding student loans will have an easier time getting a mortgage from September, when new lending rules will take effect.
Banks will be able to disregard higher education loan program (HELP) debts, which include HECS debt, when assessing a homebuyer for a mortgage.
The changes were finalised this week, after the Albanese government made a pre-election pledge in February to level the playing field for people with student debts.
The Australian Prudential Regulation Authority has advised banks to remove HELP debt from debt-to-income reporting, a metric used to determine a person's capacity to repay a mortgage.
The regulator has also clarified that it may be reasonable for banks to completely disregard a person's HELP debt from serviceability assessments, where it's expected the loan will be paid off within 12 months.
Treasurer Jim Chalmers said the changes would make lending rules fairer.
"We're making sure young people with a HELP debt are treated fairly and supporting them to get into the property market," he said.
The changes mean a dual-income household with two student debts could borrow an additional $50,000 in the year they expect to pay off their student loan, according to the government's own analysis.
APRA has written to lenders and the industry to advise them of the changes and their new obligations.
The revised standards for banks will come into effect on September 30, 2025.
In its letter to lenders, APRA said the changes would provide regulatory clarity and reaffirm the flexibility banks had in considering borrowers' individual circumstances.
The regulator expects the changes will allow some borrowers with student debts to secure a home loan sooner.
Education Minister Jason Clare said the Universities Accord found that banks' assessments of student debt made it harder for young Australians to buy a home.
"HECS was never meant to be a handbrake on owning a home," he said.
"That's not fair and we're fixing it."
The federal government will also move ahead with its plan to reduce student debts by 20 per cent, something it committed to before the May election.
During the election campaign, Prime Minister Anthony Albanese promised the legislative changes would be his first priority if his government was to be re-elected.
The government has reaffirmed this, saying it will be the first piece of legislation introduced when Parliament returns on July 22, 2025.
The 20 per cent reduction will occur once the legislation passes Parliament. However, the government has clarified the discount will be calculated based on a person's HELP debt amount as at June 1, 2025, before indexation was applied.
This means the 2025 indexation will only apply to the remaining balance after the 20 per cent reduction.
People with outstanding student loans will have an easier time getting a mortgage from September, when new lending rules will take effect.
Banks will be able to disregard higher education loan program (HELP) debts, which include HECS debt, when assessing a homebuyer for a mortgage.
The changes were finalised this week, after the Albanese government made a pre-election pledge in February to level the playing field for people with student debts.
The Australian Prudential Regulation Authority has advised banks to remove HELP debt from debt-to-income reporting, a metric used to determine a person's capacity to repay a mortgage.
The regulator has also clarified that it may be reasonable for banks to completely disregard a person's HELP debt from serviceability assessments, where it's expected the loan will be paid off within 12 months.
Treasurer Jim Chalmers said the changes would make lending rules fairer.
"We're making sure young people with a HELP debt are treated fairly and supporting them to get into the property market," he said.
The changes mean a dual-income household with two student debts could borrow an additional $50,000 in the year they expect to pay off their student loan, according to the government's own analysis.
APRA has written to lenders and the industry to advise them of the changes and their new obligations.
The revised standards for banks will come into effect on September 30, 2025.
In its letter to lenders, APRA said the changes would provide regulatory clarity and reaffirm the flexibility banks had in considering borrowers' individual circumstances.
The regulator expects the changes will allow some borrowers with student debts to secure a home loan sooner.
Education Minister Jason Clare said the Universities Accord found that banks' assessments of student debt made it harder for young Australians to buy a home.
"HECS was never meant to be a handbrake on owning a home," he said.
"That's not fair and we're fixing it."
The federal government will also move ahead with its plan to reduce student debts by 20 per cent, something it committed to before the May election.
During the election campaign, Prime Minister Anthony Albanese promised the legislative changes would be his first priority if his government was to be re-elected.
The government has reaffirmed this, saying it will be the first piece of legislation introduced when Parliament returns on July 22, 2025.
The 20 per cent reduction will occur once the legislation passes Parliament. However, the government has clarified the discount will be calculated based on a person's HELP debt amount as at June 1, 2025, before indexation was applied.
This means the 2025 indexation will only apply to the remaining balance after the 20 per cent reduction.
People with outstanding student loans will have an easier time getting a mortgage from September, when new lending rules will take effect.
Banks will be able to disregard higher education loan program (HELP) debts, which include HECS debt, when assessing a homebuyer for a mortgage.
The changes were finalised this week, after the Albanese government made a pre-election pledge in February to level the playing field for people with student debts.
The Australian Prudential Regulation Authority has advised banks to remove HELP debt from debt-to-income reporting, a metric used to determine a person's capacity to repay a mortgage.
The regulator has also clarified that it may be reasonable for banks to completely disregard a person's HELP debt from serviceability assessments, where it's expected the loan will be paid off within 12 months.
Treasurer Jim Chalmers said the changes would make lending rules fairer.
"We're making sure young people with a HELP debt are treated fairly and supporting them to get into the property market," he said.
The changes mean a dual-income household with two student debts could borrow an additional $50,000 in the year they expect to pay off their student loan, according to the government's own analysis.
APRA has written to lenders and the industry to advise them of the changes and their new obligations.
The revised standards for banks will come into effect on September 30, 2025.
In its letter to lenders, APRA said the changes would provide regulatory clarity and reaffirm the flexibility banks had in considering borrowers' individual circumstances.
The regulator expects the changes will allow some borrowers with student debts to secure a home loan sooner.
Education Minister Jason Clare said the Universities Accord found that banks' assessments of student debt made it harder for young Australians to buy a home.
"HECS was never meant to be a handbrake on owning a home," he said.
"That's not fair and we're fixing it."
The federal government will also move ahead with its plan to reduce student debts by 20 per cent, something it committed to before the May election.
During the election campaign, Prime Minister Anthony Albanese promised the legislative changes would be his first priority if his government was to be re-elected.
The government has reaffirmed this, saying it will be the first piece of legislation introduced when Parliament returns on July 22, 2025.
The 20 per cent reduction will occur once the legislation passes Parliament. However, the government has clarified the discount will be calculated based on a person's HELP debt amount as at June 1, 2025, before indexation was applied.
This means the 2025 indexation will only apply to the remaining balance after the 20 per cent reduction.
Banks will be able to disregard higher education loan program (HELP) debts, which include HECS debt, when assessing a homebuyer for a mortgage.
The changes were finalised this week, after the Albanese government made a pre-election pledge in February to level the playing field for people with student debts.
The Australian Prudential Regulation Authority has advised banks to remove HELP debt from debt-to-income reporting, a metric used to determine a person's capacity to repay a mortgage.
The regulator has also clarified that it may be reasonable for banks to completely disregard a person's HELP debt from serviceability assessments, where it's expected the loan will be paid off within 12 months.
Treasurer Jim Chalmers said the changes would make lending rules fairer.
"We're making sure young people with a HELP debt are treated fairly and supporting them to get into the property market," he said.
The changes mean a dual-income household with two student debts could borrow an additional $50,000 in the year they expect to pay off their student loan, according to the government's own analysis.
APRA has written to lenders and the industry to advise them of the changes and their new obligations.
The revised standards for banks will come into effect on September 30, 2025.
In its letter to lenders, APRA said the changes would provide regulatory clarity and reaffirm the flexibility banks had in considering borrowers' individual circumstances.
The regulator expects the changes will allow some borrowers with student debts to secure a home loan sooner.
Education Minister Jason Clare said the Universities Accord found that banks' assessments of student debt made it harder for young Australians to buy a home.
"HECS was never meant to be a handbrake on owning a home," he said.
"That's not fair and we're fixing it."
The federal government will also move ahead with its plan to reduce student debts by 20 per cent, something it committed to before the May election.
During the election campaign, Prime Minister Anthony Albanese promised the legislative changes would be his first priority if his government was to be re-elected.
The government has reaffirmed this, saying it will be the first piece of legislation introduced when Parliament returns on July 22, 2025.
The 20 per cent reduction will occur once the legislation passes Parliament. However, the government has clarified the discount will be calculated based on a person's HELP debt amount as at June 1, 2025, before indexation was applied.
This means the 2025 indexation will only apply to the remaining balance after the 20 per cent reduction.
People with outstanding student loans will have an easier time getting a mortgage from September, when new lending rules will take effect.
Banks will be able to disregard higher education loan program (HELP) debts, which include HECS debt, when assessing a homebuyer for a mortgage.
The changes were finalised this week, after the Albanese government made a pre-election pledge in February to level the playing field for people with student debts.
The Australian Prudential Regulation Authority has advised banks to remove HELP debt from debt-to-income reporting, a metric used to determine a person's capacity to repay a mortgage.
The regulator has also clarified that it may be reasonable for banks to completely disregard a person's HELP debt from serviceability assessments, where it's expected the loan will be paid off within 12 months.
Treasurer Jim Chalmers said the changes would make lending rules fairer.
"We're making sure young people with a HELP debt are treated fairly and supporting them to get into the property market," he said.
The changes mean a dual-income household with two student debts could borrow an additional $50,000 in the year they expect to pay off their student loan, according to the government's own analysis.
APRA has written to lenders and the industry to advise them of the changes and their new obligations.
The revised standards for banks will come into effect on September 30, 2025.
In its letter to lenders, APRA said the changes would provide regulatory clarity and reaffirm the flexibility banks had in considering borrowers' individual circumstances.
The regulator expects the changes will allow some borrowers with student debts to secure a home loan sooner.
Education Minister Jason Clare said the Universities Accord found that banks' assessments of student debt made it harder for young Australians to buy a home.
"HECS was never meant to be a handbrake on owning a home," he said.
"That's not fair and we're fixing it."
The federal government will also move ahead with its plan to reduce student debts by 20 per cent, something it committed to before the May election.
During the election campaign, Prime Minister Anthony Albanese promised the legislative changes would be his first priority if his government was to be re-elected.
The government has reaffirmed this, saying it will be the first piece of legislation introduced when Parliament returns on July 22, 2025.
The 20 per cent reduction will occur once the legislation passes Parliament. However, the government has clarified the discount will be calculated based on a person's HELP debt amount as at June 1, 2025, before indexation was applied.
This means the 2025 indexation will only apply to the remaining balance after the 20 per cent reduction.
People with outstanding student loans will have an easier time getting a mortgage from September, when new lending rules will take effect.
Banks will be able to disregard higher education loan program (HELP) debts, which include HECS debt, when assessing a homebuyer for a mortgage.
The changes were finalised this week, after the Albanese government made a pre-election pledge in February to level the playing field for people with student debts.
The Australian Prudential Regulation Authority has advised banks to remove HELP debt from debt-to-income reporting, a metric used to determine a person's capacity to repay a mortgage.
The regulator has also clarified that it may be reasonable for banks to completely disregard a person's HELP debt from serviceability assessments, where it's expected the loan will be paid off within 12 months.
Treasurer Jim Chalmers said the changes would make lending rules fairer.
"We're making sure young people with a HELP debt are treated fairly and supporting them to get into the property market," he said.
The changes mean a dual-income household with two student debts could borrow an additional $50,000 in the year they expect to pay off their student loan, according to the government's own analysis.
APRA has written to lenders and the industry to advise them of the changes and their new obligations.
The revised standards for banks will come into effect on September 30, 2025.
In its letter to lenders, APRA said the changes would provide regulatory clarity and reaffirm the flexibility banks had in considering borrowers' individual circumstances.
The regulator expects the changes will allow some borrowers with student debts to secure a home loan sooner.
Education Minister Jason Clare said the Universities Accord found that banks' assessments of student debt made it harder for young Australians to buy a home.
"HECS was never meant to be a handbrake on owning a home," he said.
"That's not fair and we're fixing it."
The federal government will also move ahead with its plan to reduce student debts by 20 per cent, something it committed to before the May election.
During the election campaign, Prime Minister Anthony Albanese promised the legislative changes would be his first priority if his government was to be re-elected.
The government has reaffirmed this, saying it will be the first piece of legislation introduced when Parliament returns on July 22, 2025.
The 20 per cent reduction will occur once the legislation passes Parliament. However, the government has clarified the discount will be calculated based on a person's HELP debt amount as at June 1, 2025, before indexation was applied.
This means the 2025 indexation will only apply to the remaining balance after the 20 per cent reduction.
People with outstanding student loans will have an easier time getting a mortgage from September, when new lending rules will take effect.
Banks will be able to disregard higher education loan program (HELP) debts, which include HECS debt, when assessing a homebuyer for a mortgage.
The changes were finalised this week, after the Albanese government made a pre-election pledge in February to level the playing field for people with student debts.
The Australian Prudential Regulation Authority has advised banks to remove HELP debt from debt-to-income reporting, a metric used to determine a person's capacity to repay a mortgage.
The regulator has also clarified that it may be reasonable for banks to completely disregard a person's HELP debt from serviceability assessments, where it's expected the loan will be paid off within 12 months.
Treasurer Jim Chalmers said the changes would make lending rules fairer.
"We're making sure young people with a HELP debt are treated fairly and supporting them to get into the property market," he said.
The changes mean a dual-income household with two student debts could borrow an additional $50,000 in the year they expect to pay off their student loan, according to the government's own analysis.
APRA has written to lenders and the industry to advise them of the changes and their new obligations.
The revised standards for banks will come into effect on September 30, 2025.
In its letter to lenders, APRA said the changes would provide regulatory clarity and reaffirm the flexibility banks had in considering borrowers' individual circumstances.
The regulator expects the changes will allow some borrowers with student debts to secure a home loan sooner.
Education Minister Jason Clare said the Universities Accord found that banks' assessments of student debt made it harder for young Australians to buy a home.
"HECS was never meant to be a handbrake on owning a home," he said.
"That's not fair and we're fixing it."
The federal government will also move ahead with its plan to reduce student debts by 20 per cent, something it committed to before the May election.
During the election campaign, Prime Minister Anthony Albanese promised the legislative changes would be his first priority if his government was to be re-elected.
The government has reaffirmed this, saying it will be the first piece of legislation introduced when Parliament returns on July 22, 2025.
The 20 per cent reduction will occur once the legislation passes Parliament. However, the government has clarified the discount will be calculated based on a person's HELP debt amount as at June 1, 2025, before indexation was applied.
This means the 2025 indexation will only apply to the remaining balance after the 20 per cent reduction.
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