Quick summary
If you’ve been told your HECS / HELP debt is holding you back from a mortgage, 2025 may be the year that changes. Regulators and major lenders have moved to treat HELP debt differently — which can increase borrowing capacity for many borrowers. Some banks have already adjusted policies, and APRA guidance will formalise changes from late 2025. If you’re a graduate with a HELP debt, this could mean thousands more in borrowing power — and a faster route to homeownership.
What changed (the facts)
- Regulators and the Federal Government have pressured lenders to reassess how they count HELP debts when assessing home loans. Several lenders now treat HELP differently in their serviceability or debt-to-income (DTI) calculations.
- Commonwealth Bank and other major lenders have updated internal rules to reduce or exclude small HELP balances from borrowing calculations; NAB announced similar moves for small balances.
- APRA has signalled (and set rules) that HECS/HELP should not be included in DTI calculations from around late September 2025, meaning lenders will not count HELP in the same way they count credit cards or personal loans.
- The Federal Government has also moved on student debt relief and indexation reforms, reducing the real burden on many graduates — a separate policy change that complements the lender changes.
Why this matters (a plain-English view)
Lenders use several ratios and calculations to decide how much they’ll lend you. One key figure is Debt-to-Income (DTI) — lenders add up your ongoing debts and divide by income to see how stretched you are. Until recently, HELP debts were often treated like a monthly loan repayment, which reduced borrowing power for those with HECS balances.
If lenders stop counting HELP in DTI (or treat it far more leniently), the practical outcome is straightforward:
- You could qualify for a larger loan.
- You may be able to borrow sooner (or borrow enough to afford the suburb you want).
- Some buyers who were previously squeezed out will now come into contention for pre-approval.
In short: the barrier created by student debt can be lowered — materially — for many borrowers.
What lenders are already doing (and what to expect)
- Commonwealth Bank announced updated assessment rules earlier in 2025 to reduce the impact of HELP debts on serviceability for some borrowers.
- NAB said it would stop counting small HELP debts (e.g., under a threshold) in some assessments from mid-2025.
- Other lenders and brokers reported that internal policy trials have been running, and from late 2025 APRA’s updated position will make industry-wide adjustments more consistent.
The takeaway: some lenders moved early; others are following; regulators are formalising this shift so it becomes standard practice.
How big is the effect? (examples)
Numbers will vary depending on income, deposit, living expenses and the lender’s specific policy. But to give you a feel:
- A borrower on $95k with a $25k HELP debt might previously have seen their borrowing capacity reduced by around $40k–$80k depending on how the lender calculated a notional HELP repayment. Under the new approach, that reduction may vanish or shrink substantially.
- For many first-home buyers, this can mean the difference between being able to borrow $600k vs $650k — enough to buy in a different suburb or a larger property.
(These examples are indicative. We’ll run your numbers to show the exact impact for you.)
Real-world client scenarios (how we’d apply this)
Client A — “Sophie” — early-career nurse, $95k salary, $18k HELP debt
We reviewed Sophie’s pre-approval under the new HELP treatment and found she could increase her borrowing power enough to move from outer to middle-ring suburbs. With a tailored loan structure (offset + 30-year term reset), she keeps repayments manageable and builds equity faster.
Client B — “Tom & Jess” — dual-income couple, combined $180k, Tom has $45k HELP debt
Under old rules Tom’s HELP debt shaved off about $60k of borrowing capacity. With revised treatment, they can consider two more suburbs closer to work — letting them make bids where they’d previously missed out.
(These client vignettes are illustrative — they reflect typical outcomes we’re seeing and are useful to spark conversation with your own situation.)
Practical steps you should take right now
- Check where you stand: Ask your broker/lender for a new assessment using updated HELP rules. If you already have a pre-approval from earlier in the year, get it re-run.
- Gather evidence: Lenders may want your tax return and ATO summary showing HELP balance; have these handy.
- Consider deposit & buffers: Even if your borrowing limit increases, don’t forget to leave buffers for interest-rate rises, moving costs, and repairs.
- Compare lenders: Not all lenders will treat HELP the same way yet. A broker can shop policies and find the ones offering the most favourable approach for your profile.
- Plan for other changes: There’s also parallel student-debt relief work at the federal level (indexation and potential cuts) which can improve positions further — factor those updates in later in the year.
Risks & things to watch
- Policies differ by bank. Some lenders may exclude very small HELP balances but still apply conservative assessments for higher balances.
- A change in policy doesn’t eliminate other serviceability hurdles (living expenses, existing loans, interest rate buffers).
- If you lean on a higher borrowing limit, have an exit plan and contingency cash; higher debt levels increase vulnerability to income shocks or rate rises.
How I can help (what Bharat Finance will do for you)
- Run a no-obligation pre-check using the latest lender rules to quantify any uplift in your borrowing power.
- Compare lenders and recommend the product that best balances rate, fees and flexibility.
- Structure your loan to include offset and repayment options to minimise interest over time.
- Prepare the correct paperwork so you get a clean, fast lender assessment.
If you’ve been told “your HECS will stop you” — there’s a very good chance that’s no longer true. Let’s run your numbers and see.
FAQs (quick answers)
Q: Does this mean HECS/HELP is gone from all calculations?
A: Not quite — the change reduces or excludes HECS from DTI for many assessments, but lenders still look at your overall financial profile. Outcomes vary by lender and HELP balance.
Q: Will every bank apply this the same way?
A: No — some banks moved early, others will follow. A broker can identify which lenders will give you the best result.
Q: I’ve got a big HELP debt — will I still get help?
A: Large HELP debts may still be considered differently; the benefit is proportionally bigger for those with moderate HELP balances. We can model it for you.
Ready to see what this means for you?
Contact me and I’ll run a personalised calculation — no obligation. This may be the push that gets you from “thinking about it” to “homeowner.”