Obtaining a home loan when you have student debt

If you’re a university graduate, chances are you’ve racked up HECS/HELP or student loan debt. If you’re at the stage in life where you’re looking to invest in a home, and you’re worried your debt will hold you back – don’t be disheartened, there’s still hope!

When you apply for a home loan, you’ll need to reveal information to your lender about your liabilities, other existing debts and allow us to look into your credit rating. In comparison to credit card debt or personal loans, HECS is considered ‘good debt’, because it’s essentially contributed towards your future income and doesn’t accumulate interest – only indexation in line with inflation annually.

If you’ve deferred your HECS payments during university (which most Australians do), you don’t need to start paying it off until you’re earning an annual taxable income of $46,620 or more. At this point, your employer is required to hold a percentage of your taxable income and direct it towards your HECS loan, which does decrease your annual income.

Every situation is different, and our brokers will review your circumstances carefully and ensure that you’re given the best honest advice for you. If we aren’t able to assist you straight away, we can offer you tips for preparation and guide you to your home loan in the future.

If you’re wanting to buy a property, stop wondering if you can. Get in touch so we can guide you to your dream!