Buying A Home

Can a HECS-HELP debt affect your home loan application?


If you used a HECS-HELP loan to fund your uni degree, you might be wondering: will a study loan affect my mortgage process? We’ll answer this question below as well as some other HECS-HELP debt questions you might have.

What is a HECS-HELP debt? And are HECS and HELP debts the same thing?

HECS-HELP is part of a government scheme to help eligible students through uni. HECS-HELP is the official name, with HECS being the more commonly used phrase. HECS (Higher Education Contribution Scheme) can cover all or part of your course fees, up to a maximum amount.

How is HECS repaid?

Once you reach a certain income threshold, you must start making compulsory repayments through the Australian Taxation Office (ATO), even if you are still studying. To manage compulsory repayments, advise your employer if you have a HECS debt. If you move overseas, you will have the same repayment requirements as those who live in Australia. This repayment threshold changes yearly, so check out the ATO’s website if you’re wondering about the current repayment rate. A quick online search for HECS debt news can also get you up to date with any recent changes.

Do you pay interest on your HECS debt?

Good news, there is no interest charged on your HECS debt. However, your HECS debt does get indexed each year on 1 June so that it aligns with the cost of living (which is measured by the Consumer Price Index).

Should I pay off my HECS debt early?

It’s hard to say if you should pay your HECS debt off early given it really depends on your individual circumstances. Consider any other debts you are repaying and whether your money is better utilised in paying these off first.

How does HECS affect home loan applications? And how do lenders treat HECS debt?

Depending on the lender, a HECS debt could be treated the same as a regular debt. It’s just something your lender will consider when figuring out your borrowing power. Before applying for a home loan, take a look at how much you still owe. It’ll make the process a lot easier when it comes time for your lender to look into your financial situation.

How do you find out your current HECS debt?

There are a few ways to find out how much you owe:

Getting that loan

Our home loan process is pretty smooth if you’ve got everything prepared. You can apply for a ubank home loan without even stepping foot outside home when you use our simple digital application process. We’ll look at your income, expenses and existing debt to figure out if we’re a good match for each other.

Other than that, happy house-hunting!