Can I get a home loan if I have student loans? Yes, you can. Having student debt does not automatically prevent you from qualifying for a mortgage in Australia.
However, your student loan can affect how much you can borrow. This guide explains how HECS-HELP is assessed, how repayments affect borrowing power, and whether paying it off makes sense.
Key Takeaways
| Question | Answer |
| Can you get a home loan with student debt? | Yes. Student debt does not automatically disqualify you. |
| Does HECS-HELP affect borrowing power? | Yes. Lenders may include your compulsory repayment when assessing affordability. |
| Does the HECS balance matter most? | Usually, your required repayment and income matter more than the balance. |
| What is the 2026–27 HELP repayment threshold? | $69,528 of repayment income. |
| Does paying HECS off improve borrowing power? | It can, but the benefit depends on your income, debt and lender. |
| Can you buy a house while studying? | Potentially, if your income and overall financial position support the loan. |
| Will every lender treat student debt the same way? | No. Lending policies and serviceability methods vary. |
| Should you pay off HECS before buying? | Not automatically. Keeping cash for your deposit and costs may be more valuable. |
What Is HECS-HELP Debt?
HECS-HELP is part of Australia’s Higher Education Loan Program.
It allows eligible students to defer certain student contribution payments.
The Australian Taxation Office manages repayments through the tax system.
Many people still use the term HECS debt when discussing these obligations.
However, HELP is the broader system covering several types of study and training loans.
Your HELP debt can include the original borrowing, indexation and applicable loan fees.
Any repayments you make reduce the amount you owe.
The important point is simple.
You can have a HELP debt and still qualify for a mortgage.
Can I Get A Home Loan If I Have Student Loans?
The short answer is, Yes, provided you meet the lender’s lending criteria.
Australian lenders assess your complete financial position. They consider your income, expenses, debts, credit history and proposed repayments.
Your student debt forms part of that assessment.
However, HECS-HELP works differently from a conventional personal loan. Your compulsory repayment depends on your repayment income.
For the 2026–27 income year, compulsory HELP repayments start once your repayment income exceeds $69,528.
Therefore, having a large HELP balance does not automatically mean you cannot qualify.
Instead, the key question becomes how your student debt affects your available income.
How Student Loans Affect Your Home Loan Application
Lenders want to know whether you can comfortably meet your new mortgage repayments.
They therefore assess your existing financial commitments before approving your application.
Your student loan can affect this assessment in several ways.
1. Your compulsory repayment reduces available income
A HELP repayment effectively reduces the income available for other commitments.
For example, suppose you earn above the repayment threshold.
Part of your income will then go towards your HELP debt through the tax system.
A lender may account for this obligation when calculating your borrowing capacity.
As a result, you may qualify for a smaller mortgage than someone with the same income and no HELP debt.
2. Your income still matters
The impact becomes more significant as your repayment income increases.
This happens because compulsory repayments increase with higher repayment income.
The current system uses marginal repayment rates rather than applying a single percentage to all income.
For 2026–27, the repayment calculation starts at 15 cents for each dollar above $69,528.
A higher rate applies to income above $129,717.
The overall repayment cannot exceed 10% of your repayment income under the marginal system.
This means two people with the same student debt can have different borrowing outcomes.
Their incomes may produce different compulsory repayment amounts.
Does HECS Affect Home Loan Borrowing Power?
It can. The exact effect depends on your income, expenses, loan amount and lender.
Lenders do not all assess HELP obligations identically.
Some may focus heavily on the compulsory repayment.
Others may apply additional internal rules when assessing serviceability.
A recent analysis of multiple Australian lenders found that the impact can become substantial for higher-income borrowers.
However, those figures represent specific scenarios rather than a universal lending rule.
Therefore, you should not assume your borrowing capacity will fall by a particular percentage.
Your individual assessment matters more than a general online estimate.
Read more: How is borrowing capacity calculated in Australia?
Why Your HECS Balance May Not Be The Main Issue
Many borrowers assume lenders focus primarily on the amount they owe.
That is not necessarily the case.
A lender may be more concerned about the compulsory repayment created by your income.
For example, two borrowers could have different HELP balances.
If both have similar repayment incomes, their assessed repayment obligations could be similar.
Therefore, voluntarily reducing the balance does not always produce a proportionate improvement.
The result depends on the lender’s policy and assessment method.
How Lenders Assess Student Debt
Lenders generally assess your entire financial position.
They must make reasonable inquiries about your circumstances and verify relevant information.
They must also assess whether the proposed credit contract would be unsuitable for you.
This means your application can involve several financial factors.
| Factor | What Lenders Consider |
| Income | Your income helps determine how much you can afford to repay. Lenders may consider your salary, regular employment income and other acceptable income sources. They may verify your income using payslips and other financial records. |
| Living expenses | Your everyday spending affects your borrowing capacity. This can include groceries, utilities, insurance, transport, childcare, rent, private school costs, subscriptions and other regular expenses. Higher living costs leave less money for mortgage repayments. |
| Other debts | Your existing debts can reduce your borrowing capacity. These may include credit cards, car loans, personal loans, buy now, pay later accounts, existing mortgages and other student loans. Paying down high-cost consumer debt can sometimes have a larger effect than paying off HELP. |
| Credit history | Your credit history can influence your application. Lenders may consider repayment history, defaults, existing credit products and recent credit applications. |
How APRA’s Serviceability Buffer Affects Your Application
Your lender does not simply check whether you can afford today’s mortgage repayment.
Banks must assess whether you could continue making repayments if circumstances become harder.
APRA confirmed in May 2026 that the mortgage serviceability buffer remains at three percentage points.
This means lenders generally assess repayments at an interest rate higher than the actual proposed rate.
The buffer helps lenders test whether borrowers have enough repayment capacity.
Your student loan therefore sits within a broader affordability assessment.
The lender considers your mortgage repayment alongside your other financial commitments.
Should I Pay Off My HECS Before Buying A House?
Not necessarily.
Paying off HELP can reduce your outstanding student debt.
However, using your savings to clear the debt could leave you with less money for your property purchase.
That creates an important trade-off.
Paying off HECS may help when:
- Your HELP repayment significantly reduces borrowing capacity.
- You have substantial savings beyond your required deposit.
- You have no higher-priority debts.
- Paying the balance improves your lender’s assessment.
- You can still cover purchasing costs and maintain an emergency buffer.
Keeping your savings may make more sense when:
- You need the money for your deposit.
- You need funds for stamp duty or other buying costs.
- You have limited emergency savings.
- Paying HELP off would leave you financially stretched.
- Your lender would not materially improve your borrowing capacity.
Therefore, paying off HECS should not be treated as an automatic step before applying.
Does Paying Off HECS Increase Your Borrowing Power?
It can, but the outcome varies.
If removing your HELP obligation eliminates a repayment included in your serviceability assessment, your borrowing capacity may improve.
However, the improvement depends on the lender’s assessment method.
It also depends on your income and other commitments.
You should therefore compare the borrowing benefit against the cash you would use to clear the debt.
For some borrowers, retaining a larger deposit can be more useful.
For others, eliminating the HELP repayment may provide a meaningful improvement.
There is no universal answer.
Can You Buy A House While Still Studying?
You may be able to buy property while studying.
However, your student status does not determine approval by itself.
Your income and ability to service the mortgage remain important.
A full-time student with little income may struggle to meet a lender’s requirements.
Conversely, someone studying part-time while earning a strong income may have a different outcome.
Your application also needs to account for your existing debts and expenses.
Therefore, lenders assess the financial position rather than simply asking whether you are a student.
Read more: Is it better to rent or buy in Australia?
Can You Get A Mortgage With HECS And A Small Deposit?
Potentially, yes.
Your student debt and your deposit are separate parts of the lending assessment.
A smaller deposit can increase the loan-to-value ratio.
It may also create additional costs or eligibility considerations.
Government home guarantee schemes may help eligible borrowers purchase with a smaller deposit.
However, you must still meet the scheme’s eligibility rules and the lender’s serviceability requirements.
Having HELP debt does not automatically prevent you from using an eligible government guarantee.
HECS-HELP Versus Private Student Loans
| Factor | HECS-HELP | Private student loan |
| Repayment system | Linked to repayment income | Usually contractual |
| Interest | HELP debts are indexed under government rules | Usually charged under loan terms |
| Repayment threshold | Yes | Usually no income threshold |
| Affects borrowing capacity | Potentially | Potentially |
| Repayment amount | Based on repayment income | Based on loan agreement |
| Lender treatment | Depends on lender policy | Depends on repayment and lender policy |
| Can you still apply for a mortgage? | Yes | Yes, if you meet lending criteria |
The distinction matters because lenders need to understand the actual repayment obligation.
What Happens If You Have HECS And A Credit Card?
Having both can reduce your borrowing capacity.
Your lender may consider your HELP repayment and your credit card commitments.
Credit card limits can matter even if you rarely use the card.
This is because the lender may assess the potential repayment associated with the available credit.
Therefore, reducing unnecessary credit limits can sometimes help.
However, you should avoid closing or changing accounts without understanding the broader consequences.
Your overall credit profile and financial position still matter..
Does HECS Affect Your Credit Score?
HELP debt is different from a conventional consumer credit account.
Your credit score is primarily concerned with information held in your credit report.
Lenders may still ask about HELP debt as part of their financial assessment.
Therefore, having a HELP balance does not mean you have a poor credit history.
Your application can still be affected by other credit issues.
These can include defaults, missed repayments and multiple recent credit applications.
MoneySmart recommends checking your credit report and addressing incorrect information before applying.
How To Improve Your Chances Of Getting Approved With HECS Debt
Having student debt does not mean you should give up on buying property.
Instead, focus on strengthening the areas lenders can assess.
Reduce unnecessary debts
Paying down high-cost debts can improve your financial position.
It can also reduce your ongoing monthly commitments.
Review your credit limits
Consider whether you need every credit card or credit facility you currently hold.
Unused credit can still affect some lending assessments.
Control discretionary spending
Lenders assess your financial position, including your regular expenses.
A clear budget can help you understand what you can realistically afford.
MoneySmart recommends reviewing income, expenses and savings before applying.
Build a larger deposit
A larger deposit reduces the amount you need to borrow.
It can also reduce your loan-to-value ratio.
However, do not use every dollar of savings simply to increase your deposit.
You still need funds for purchasing costs and unexpected expenses.
Avoid unnecessary credit applications
Multiple credit applications can affect your credit report.
MoneySmart recommends giving yourself time to improve your financial position before making another application.
Compare lender policies
Lenders do not all assess student debt in exactly the same way.
Therefore, one lender may produce a different borrowing outcome from another.
This does not mean you should apply everywhere.
Instead, understand the relevant lending policy before submitting applications.
What Documents Do You Need?
Your lender may ask for evidence of your financial position.
Depending on your circumstances, this can include:
- Recent payslips
- Bank statements
- Employment information
- Tax returns
- Notice of assessment
- Details of existing debts
- Credit card information
- HELP debt information
- Evidence of savings
- Details of other income
Self-employed applicants may need additional financial documents.
The exact requirements depend on your circumstances and lender.
Providing accurate information helps the lender assess your application correctly.
Common Mistakes To Avoid
Assuming HECS means you cannot get approved
This is one of the biggest misconceptions.
HELP debt does not automatically disqualify you.
The lender considers your overall financial position.
Assuming a small HECS balance has no impact
The balance alone does not determine the outcome.
Your income and resulting repayment obligation can be more important.
Paying off HECS without doing the numbers
Clearing the debt may reduce an assessed repayment.
However, it can also reduce your deposit and cash reserves.
Consider both sides before making a voluntary repayment.
Ignoring other debts
Your HELP debt may not be your biggest borrowing constraint.
Credit cards, personal loans and car finance can also affect serviceability.
Applying with too many lenders
Every application should have a clear purpose.
Too many applications within a short period can create unnecessary credit enquiries.
Assuming every lender uses the same policy
Lenders have different credit policies and assessment processes.
Therefore, an outcome with one lender does not necessarily predict another lender’s decision.
How Much Can You Borrow With Student Debt?
There is no single borrowing limit for someone with student debt.
Your borrowing capacity depends on several variables.
These include:
- Your income
- Your HELP repayment
- Your partner’s income
- Your living expenses
- Your other debts
- Your deposit
- Your credit commitments
- Your dependants
- The proposed loan
- The lender’s serviceability model
For example, a borrower earning $70,000 may have a very different outcome from someone earning $150,000.
Their HELP repayment obligations can differ substantially.
Therefore, online borrowing calculators should only provide an indication.
A lender’s actual assessment can produce a different result.
Conclusion
Having student debt does not automatically stop you from buying property in Australia.
The more important issue is how your student loan affects your overall borrowing capacity.
For HELP debt, your repayment income determines when compulsory repayments begin.
For 2026–27, that threshold is $69,528.
Your lender may then account for the resulting repayment when assessing your affordability.
Therefore, Buying a house with student debt is possible, but your borrowing capacity may differ.
You should also avoid assuming that paying off HECS is always the best strategy.
Keeping your savings could strengthen your deposit and financial buffer.
Conversely, clearing the debt could improve your serviceability with some lenders.
The right decision depends on your income, debts, expenses, deposit and lender policy.
Ultimately, student debt is one part of your mortgage application.
It is not an automatic barrier to becoming a home buyer.
Frequently Asked Questions
1. Can I get a home loan if I have HECS debt?
Yes. You can apply for a mortgage while carrying HECS-HELP debt.
The lender will consider your HELP repayment alongside your income, expenses and other debts.
2. Does HECS affect home loan borrowing capacity?
Yes, it can.
Your compulsory HELP repayment can reduce the income available for mortgage repayments.
The impact varies between borrowers and lenders.
3. Should I pay off my HECS before applying for a mortgage?
Not necessarily.
Paying it off may improve serviceability, but it also reduces your available savings.
Compare both outcomes before making a voluntary repayment.
4. What is the HECS repayment threshold in 2026–27?
The minimum repayment income is $69,528 for the 2026–27 income year.
Compulsory repayments apply once your repayment income exceeds that threshold.
5. Can I buy a house while I still have a student loan?
Yes.
Your student debt does not automatically prevent you from obtaining mortgage finance.
You still need to satisfy the lender’s income, expense, debt and serviceability requirements.
6. Does a large HECS debt reduce borrowing power?
It can, but the balance itself is not necessarily the main factor.
Your income and resulting compulsory repayment can be particularly important.
Lender policies can also produce different results.
7. Can I get a mortgage with HECS and a car loan?
Potentially, yes.
However, the lender will consider both repayment obligations when assessing your affordability.
Reducing other debts may improve your borrowing position.
8. Does having HECS mean I have bad credit?
No.
Having a HELP debt does not automatically mean you have a poor credit history.
Your credit profile depends on the information recorded on your credit report and your broader financial history.
Financial disclaimer: This article provides general information only. Lending criteria, government rules and individual circumstances can change. Check current government information and consider appropriate professional advice before making financial decisions.
