Insights
Yes, HECS/HELP can affect your home loan application in 2026. Not because the debt is “bad”, but because the compulsory repayments reduce your usable income. Lenders care most about serviceability, which is simply your ability to meet repayments without stress.
NAB explains it this way. HELP repayments come out of your income once you pass the threshold, so lenders treat it as money that is not available for the mortgage.
That means two people on the same salary can have different borrowing power if one is making HELP repayments.
Different lenders have different policies, but the typical assessment looks like this.
There have been two practical shifts that matter for borrowers.
First, the government has changed parts of the HELP repayment system for 2025–26, including the minimum repayment threshold and how repayments are calculated once you are above the threshold.
Second, some lenders have updated serviceability approaches. For example, NAB notes that lenders may ignore HELP repayments in serviceability tests if you are close to paying the debt off, and NAB also outlines a policy where a HELP balance at or below a set amount may not impact borrowing with them if you provide evidence.
The key point is simple. The details matter. A small HELP balance can be the difference between approved and not approved, depending on how a lender treats it.
This is the most common question. There is no universal answer, but the decision usually comes down to a trade off between deposit and serviceability.
If you are close to your borrowing ceiling, removing HELP repayments can increase usable income. If you have plenty of cash after deposit and costs, clearing a small balance can sometimes simplify your application.
If paying it off reduces your deposit or wipes out your buffer, it can make your position weaker overall. A smaller deposit can increase your loan size and repayments, which can offset the benefit.
Start with a conservative borrowing estimate. Then run a second estimate assuming the HELP repayment is removed. If the difference is small, keeping your cash buffer is often the better decision. If the difference is meaningful and you still have a buffer, paying it down may be worth considering.
The right answer is the one that leaves you with enough deposit, enough buffer, and repayments that feel comfortable.
Not sure what your numbers might look like yet? Try our Borrowing Power Calculator to get a rough starting range before you speak with a broker. It’s only a guide, but it can help you understand what might be possible based on your income, expenses and current commitments.
No. Many borrowers with HELP are approved. It just reduces usable income, which can reduce borrowing power.
Not always. If doing so reduces your deposit or buffer, it may not help. It is worth modelling both scenarios.
Sometimes lenders may treat a small balance more favourably. It depends on lender policy and your overall numbers.
HELP is a government loan and is assessed differently to credit cards or personal loans. Lenders still factor in the repayment impact on income.
Yes, because joint borrowing power depends on combined usable income and combined liabilities.
We can help you sense check structure, borrowing power, and next steps so you can move forward confidently, without creating a compliance headache later.
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