If you’ve got a HECS-HELP debt, the way lenders assess it when you apply for a home loan is shifting — and those changes could open up new borrowing opportunities sooner than you might think.
Several major lenders have already updated their approach, and more are expected to follow. It’s all part of a broader regulatory move to treat student debt more fairly, recognising its income-based structure.
What's Changing
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Debts due for repayment within 12 months are increasingly being excluded from home loan assessments.
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Debts with 1–5 years remaining are being treated with a lighter buffer than before.
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Smaller balances — in some cases under $20,000 — are no longer being factored into borrowing capacity at all.
The impact can be significant:
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For an individual borrower, these changes could mean tens of thousands of dollars more in borrowing power.
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For couples, the difference could stretch into the hundreds of thousands.
For some borrowers, the difference is substantial. An increase of around $100,000 in borrowing power could shift your options significantly, for example, turning a $700,000 budget into $800,000. That extra capacity might be the difference between a smaller unit and one with an extra bedroom, or between a property without a backyard and one with a backyard.
Why the Shift?
Treasury and regulators have pushed for student debt to be treated differently from traditional liabilities. Unlike a credit card or car loan, HECS repayments scale with income and disappear once the balance is paid out.
Updated guidance from APRA, due to take effect later this year, is encouraging lenders to align with this more reasonable approach.
What This Means for You
If you carry a HECS-HELP balance, now is the time to review your borrowing capacity. Even if you checked just six months ago, your position may look very different today.
And strategy matters:
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Paying down part of your HECS could unlock far more in borrowing power.
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Reducing a balance under certain thresholds may see it excluded entirely.
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Moving into the 1–5 year repayment window can also improve outcomes.
Every situation is unique, but the right approach could mean buying sooner or borrowing smarter.
The Bottom Line
Lenders are beginning to ease how HECS debt is treated in home loan applications, and the momentum is only growing.
👉 If you’ve got a HECS-HELP balance, don’t wait. Reviewing your borrowing power now could open the door to opportunities that weren’t available just months ago.
