If you’re carrying a HECS-HELP debt and planning to buy your first home, there’s some good news out of the Commonwealth Bank. CBA has announced changes to the way it assesses student debt in home loan applications and the update could give first-home buyers a real advantage.
Traditionally, banks apply a flat percentage to your income to estimate HECS repayments—even if your actual repayments are lower. This approach often reduced borrowing capacity, particularly for younger buyers or recent graduates. Now, CBA is taking a more realistic and tailored approach.
What’s Changing?
Rather than using a generic estimate, CBA will start assessing HECS-HELP repayments based on your actual repayment obligations. If your student loan is close to being paid off, or your income means you’re repaying only a small amount, this can work in your favour.
Plus, for some applicants with HECS-HELP debts expected to be cleared within five years, CBA is trialling a lower servicing buffer. That’s a fancy way of saying they’ll factor in less financial “cushioning” for that debt—meaning you could qualify to borrow more without adding extra risk.
Why This Matters
With home prices still rising and borrowing power under pressure from high interest rates, every bit of extra capacity counts. This update is particularly helpful for buyers who have steady income, low expenses and just a lingering student debt that’s not far from being paid off. By recognising the true nature of HECS-HELP—income-contingent and paused during periods of unemployment—CBA is helping level the playing field.
What Should You Do?
If you’ve been holding off on applying for a home loan because of your HECS-HELP balance, it might be time for a fresh look. This change could mean you’re eligible to borrow more than before—and we’re here to help you figure that out.
At Madd, we work with multiple lenders and stay up to date with the latest policy changes to ensure our clients are always informed and well-prepared. Reach out if you’d like us to assess how this could impact your borrowing power.
