Australia Adjusts Lending Rules to Ease Home Buying for Student Debt Holders

New guidelines allow banks to disregard certain student loan repayments for mortgage assessments if debts are expected to be repaid soon.

Treasurer Jim Chalmers announced changes to lending rules, enabling banks to exclude HECS-HELP debts from mortgage serviceability tests under specific conditions.
The Australian Prudential Regulation Authority (APRA) and ASIC will clarify that banks can disregard student loan repayments if the debt is likely to be paid off in the near term, though the definition of 'near term' remains under consultation.
The changes aim to improve borrowing capacity for young Australians, as student debts have increasingly hindered access to home loans amid rising housing costs and interest rates.
APRA will also revise rules for housing developers, stating that full pre-sale of units is no longer required to secure construction loans, potentially boosting housing supply.
The new measures are part of broader efforts to address housing challenges, including Labor’s promise to reduce student debts by 20% if re-elected.