Having a HECS-HELP debt doesn't automatically prevent you from buying a home. However, your HELP repayments can be taken into account when a lender assesses your income, expenses and overall ability to repay a mortgage.
For many first-home buyers in Mackay, this is an important consideration — particularly if you've recently finished university or are still making compulsory repayments on your student debt.
The good news? You don't necessarily need to pay off your HECS-HELP debt before applying for a home loan.
Here's what you need to know.
How Does HECS-HELP Debt Affect a Home Loan?
When a lender assesses your home loan application, they're interested in how much money you have available to meet your new mortgage repayments.
Your HELP debt can affect this because compulsory repayments reduce the amount of your income available for other expenses and loan repayments.
Lenders can therefore take your HELP repayment obligations into account when calculating your borrowing capacity.
For example, if two people have similar salaries but one has a HELP debt that results in compulsory repayments, their borrowing capacity may be different.
This doesn't mean the person with HECS-HELP debt can't get a home loan. It simply means the debt may form part of the lender's assessment.
Does HECS-HELP Debt Count as a Debt When Applying for a Mortgage?
Yes, lenders can consider HECS-HELP debt when assessing a home loan application.
However, HELP debt isn't exactly the same as a credit card, car loan or personal loan.
HELP repayments are generally linked to your income rather than being a fixed monthly repayment like many other types of debt.
The way HELP debt is treated can also vary between lenders and their individual lending policies.
For example, NAB currently states that compulsory HELP repayments can reduce disposable income and therefore borrowing power, while its lending policy also has specific provisions for some customers with smaller HELP balances.
This is one reason it can be useful to compare different lenders rather than assuming every bank will assess your situation in exactly the same way.
Do I Need to Pay Off HECS Before Buying a House?
Not necessarily.
There isn't a universal rule that says you must clear your HECS-HELP debt before applying for a mortgage.
Whether paying it off makes sense depends on your circumstances.
For example, paying off your HELP debt could potentially reduce your ongoing repayment obligation, but using a large portion of your savings to clear the debt could also leave you with less money for your:
Home deposit
Stamp duty and other purchasing costs
Conveyancing
Building and pest inspections
Moving costs
Emergency savings
That's why it's important to look at the whole picture, rather than assuming paying off HECS is automatically the best option.
Could Paying Off HECS Increase Your Borrowing Power?
Potentially, yes — but it depends on your circumstances and the lender.
If your HELP repayment is reducing your available income, eliminating that repayment obligation may improve your borrowing capacity with some lenders.
However, if paying off your HECS debt means using most of your deposit savings, there can be other consequences.
For example:
You have $50,000 saved for your home deposit.
You could use $20,000 of that to pay off your HELP debt.
You would potentially reduce your HELP repayment obligation, but you'd now only have $30,000 available towards your purchase and associated costs.
So the question isn't simply:
"Should I pay off my HECS?"
It's:
"What approach makes the most sense for my overall home-buying position?"
That's something a mortgage broker can help you work through.
Do Different Banks Treat HECS-HELP Differently?
Yes.
This is an important point for anyone with HELP debt.
Lenders have their own lending policies and serviceability calculations, so the impact of your HECS-HELP debt can vary depending on the lender.
For example, CommBank has publicly outlined policy changes that can allow certain customers who are close to repaying their HELP debt to have it treated differently in its serviceability assessment.
NAB also has specific criteria around HELP debt, including a policy for eligible customers with HELP balances of $20,000 or less.
This is why an online borrowing calculator may not tell the whole story.
A broker can compare your circumstances across available lending options rather than simply applying one lender's approach.
What If I'm a First Home Buyer With HECS?
If you're a first-home buyer in Mackay with HECS-HELP debt, don't assume you need to wait until your student debt is completely paid off before looking at property.
Instead, consider getting an idea of your borrowing capacity first.
A lender or broker will generally look at a combination of factors, including your:
Income
Existing debts
HELP repayment obligations
Living expenses
Credit card limits
Dependants
Deposit and savings
Employment circumstances
Overall financial commitments
Lenders use this information to assess whether you can comfortably service the proposed loan.
What About the 2026 Changes to HELP Repayments?
There have also been changes to the way compulsory HELP repayments are calculated from the 2025–26 income year.
The Australian Taxation Office says the new system means that, depending on income, some people will have smaller compulsory repayments, while people with repayment income of $67,000 or less will not have a compulsory repayment under the new system.
Because your HELP repayment can affect your available income, changes to repayment rules may also be relevant when you're planning for a home loan.
However, the way a particular lender treats HELP repayments when assessing your borrowing capacity can still vary.
Can I Buy a House If I Still Have HECS?
Yes.
Having HECS-HELP debt doesn't automatically rule you out of getting a mortgage.
The key is understanding how your particular HELP repayment obligation affects your borrowing capacity and which lending options may be available to you.
If you're thinking about buying in Mackay, it can be worthwhile getting your borrowing position assessed before you start seriously looking at properties.
That way, you'll have a clearer idea of your budget before you fall in love with a house that's outside your price range.
HECS-HELP & Home Loans: Frequently Asked Questions
Can I get a home loan if I have HECS-HELP debt?
Yes. HECS-HELP debt does not automatically prevent you from getting a home loan. However, lenders may consider your compulsory HELP repayments when assessing your borrowing capacity.
Does HECS reduce borrowing power?
It can. Because compulsory HELP repayments can reduce the income available for mortgage repayments, they may reduce your borrowing capacity. The impact depends on your income, HELP repayment and the lender's assessment policy.
Should I pay off HECS before applying for a home loan?
Not necessarily. Paying it off may improve your borrowing position in some circumstances, but it could also reduce the savings you have available for your deposit and purchasing costs.
Do all banks treat HECS the same way?
No. Lenders can have different policies and serviceability calculations when assessing HELP debt.
Can I get a first home loan with HECS?
Yes. Having HECS-HELP debt doesn't automatically prevent you from purchasing your first home.
Should I pay off HECS or save for a bigger deposit?
There isn't one answer that applies to everyone. It depends on your income, HELP repayment, savings, borrowing capacity and the lender options available to you.
Buying a Home in Mackay With HECS-HELP Debt?
If you've got HECS-HELP debt and you're thinking about buying your first home in Mackay, don't automatically assume you need to pay it off first.
At Gardian Finance, we can look at your individual circumstances and help you understand how your HECS-HELP debt may affect your borrowing position and what lending options may be available.
