The short answer
- Lenders count your compulsory HECS-HELP repayments, because they come out of your pay.
- That lowers your borrowing power, but 2025 changes helped: debts were cut by 20%, and repayments now only apply to income above the threshold.
- HECS-HELP no longer counts towards the debt-to-income measure banks report to APRA.
- If your debt will be paid off soon, some lenders may ignore the repayments altogether.
- Paying it off before you buy can help, but it isn't always the best use of your savings.
How lenders count HECS-HELP
HECS-HELP doesn't charge interest, and lenders aren't usually worried about the balance. What matters is the compulsory repayment taken from your pay, because it reduces the income you have left for a home loan. Lenders work out that repayment from your income and include it when they check whether you can afford the loan.
What changed in 2025
- Debts were cut by 20%. The reduction applied to HELP and other study debts that existed on 1 June 2025.
- Repayments now only apply to income above the threshold. Since 1 July 2025, compulsory repayments are worked out on the part of your income over the minimum, not your whole income, so many people now repay less each year. Source: ATO
- Excluded from the debt-to-income measure. APRA confirmed that from 30 September 2025, HELP debt is left out of the debt-to-income figures banks report, which matters now that banks limit loans at six or more times income.
- Some lenders can ignore repayments if the debt is nearly gone. APRA said it's reasonable for banks to consider your circumstances, for example if the debt will be repaid within 12 months, and approve the loan as an exception to their usual rules. Source: APRA
HECS-HELP repayment rates for 2026–27
| Repayment income | Compulsory repayment |
|---|---|
| Up to $69,528 | Nil |
| $69,529 to $129,717 | 15c for each $1 over $69,528 |
| $129,718 to $186,050 | $9,028 plus 17c for each $1 over $129,717 |
| $186,051 and over | 10% of your total repayment income |
Repayment income includes your taxable income plus some other amounts, such as reportable super contributions. Source: ATO, study and training loan repayment thresholds and rates.
What it means for your borrowing power
Here's roughly how much the repayment could reduce what you can borrow, based on a single income and a loan tested at 9% over 30 years.
| Income | HECS-HELP repayment a year | Per month | Could reduce borrowing power by about |
|---|---|---|---|
| $70,000 | $71 | $6 | $1,000 |
| $80,000 | $1,571 | $131 | $16,000 |
| $100,000 | $4,571 | $381 | $47,000 |
| $120,000 | $7,571 | $631 | $78,000 |
| $150,000 | $12,476 | $1,040 | $129,000 |
Example only, using the ATO's 2026–27 repayment rates. Each lender works this out differently. Try your own numbers in our borrowing power calculator, which includes HECS-HELP.
Should you pay off HECS-HELP before you buy?
It depends on your numbers. Paying it off removes the repayment from the lender's calculation, which can lift your borrowing power. But it also uses savings you might need for your deposit and buying costs.
- HECS-HELP doesn't charge interest. It's indexed once a year at the lower of inflation (CPI) or wage growth (WPI). Source: Department of Education
- A small deposit can cost more. Using savings to clear HECS-HELP could mean paying lenders mortgage insurance, or missing out on the First Home Guarantee's 5% threshold.
- If it's nearly paid off, some lenders may ignore the repayments anyway, so you may not need to clear it.
- If your income is close to the threshold, the repayment may be small enough to make little difference.
The best approach is to compare your borrowing power both ways before deciding. That's something we can do for you in a free chat.
Tips if you have HECS-HELP
- Check your balance in myGov (via the ATO) so you know where you stand.
- Keep your other debts low, especially credit card limits, which also count against you.
- Ask about lender policies if your debt will be paid off within a year.
- Get pre-approved before you house hunt, so you know your real budget.
Information is general and correct as at October 2026. Repayment thresholds change each year, and lender policies vary.