Does HECS/HELP Reduce Borrowing Power?

Yes — once your income is above the ATO's repayment threshold, a HECS/HELP debt usually reduces how much you can borrow. Lenders don't look at the size of the debt so much as the compulsory repayment it takes out of your pay each year, and they treat that repayment like any other loan commitment. Below the threshold ($69,528 in 2026–27) there is no compulsory repayment, so the effect is usually nil.

Model it: turn on "HECS/HELP debt" in the Borrowing Power Calculator.

The 2026–27 HELP repayment rates

From the 2025–26 income year, compulsory repayments are charged only on income above the threshold (ATO, checked 1 October 2026):

Repayment income (2026–27)	Compulsory repayment
Up to $69,528	Nil
$69,529 – $129,717	15c for each $1 over $69,528
$129,718 – $186,050	$9,028 + 17c for each $1 over $129,717
$186,051 and over	10% of total repayment income

How much it reduces borrowing power (examples)

Single applicant, no dependants, benchmark living expenses, 6.45% interest assessed at 9.45% (with APRA's 3 percentage point buffer), 30 years. Calculated with the MoneyWiseCalc borrowing power model:

Income	HELP repayment	Borrowing estimate without HELP	With HELP	Reduction
$60,000	Nil	$192,000	$192,000	$0
$75,000	$821 a year ($68/month)	$261,000	$253,000	$8,000
$90,000	$3,071 a year ($256/month)	$313,000	$282,000	$31,000
$120,000	$7,571 a year ($631/month)	$418,000	$342,000	$76,000
$150,000	$12,476 a year ($1,040/month)	$522,000	$398,000	$124,000
$200,000	$20,000 a year ($1,667/month)	$696,000	$497,000	$199,000

The pattern is the point: because the repayment rate rises with income, a HELP debt takes a bigger bite out of borrowing power for higher earners — about $10 less borrowing for every $1 a year of HELP repayment at today's assessment rate. Lenders' own models differ, so treat these as indicative.

Does paying off HECS increase borrowing power?

Usually, yes: with no HELP debt there is no compulsory repayment for the lender to count. Whether it's worth using savings to clear it depends on the balance and on your deposit — every dollar used on HELP is a dollar not in your deposit, which can push you into lenders mortgage insurance.

Other points lenders consider

• Repayment income isn't just salary. The ATO counts reportable fringe benefits, net investment losses and reportable super contributions, so your compulsory repayment can be higher than salary alone suggests.
• Joint applications: each person's HELP repayment is counted against their own income.
• Variable income: bonuses and overtime may be "shaded" by the lender, but the HELP repayment is based on what the ATO counts.

Frequently asked questions

Does HECS affect borrowing power if I earn under the threshold?

Generally not — below $69,528 (2026–27) there is no compulsory repayment for a lender to count. Some lenders still ask about the debt.

How much does HECS reduce borrowing power?

In our model, about $31,000 on a $90,000 income and $124,000 on $150,000 (single applicant, 2026–27). The higher your income, the larger the effect.

Should I pay off HECS before buying a house?

It can raise your borrowing estimate, but it also reduces your deposit. Compare both in the Borrowing Power Calculator and the Can I Buy This Home? tool before deciding.

Related

• Borrowing power: how much can I borrow?
• Credit card limits and borrowing power
• DTI explained

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Important: General information only, not credit advice. Lenders' serviceability models differ; your actual borrowing capacity is set by the lender.