HECS and your borrowing capacity

March 06, 2013
David Scouller

When applying for a loan, a lender will consider the applicants total existing debt loading when determining borrowing capacity and loan serviceability.

Many graduates carry with them a debt accumulated under the Higher Education Contribution Scheme – or HECS. The repayment of this debt is often deferred under the Higher Education Loan Program  - or HELP.

Deferred fees become payable once certain income thresholds are met. Once these thresholds are reached, employers must garnish the appropriate percentage from the employees pay and direct it towards the HECS debt.

The thresholds and repayment rates can be found in the link below:


As all existing liabilities must be fully disclosed by the applicant to the lender – the amount of HECS debt remaining will lower the applicants borrowing capacity.

Lenders have different methods of calculating borrowing capacity, and an experienced mortgage advisor will be able to assist you with matching you to the right lender given your circumstance.

If you would like further advice on your HECS debt please phone me today on 0414 259 669

Posted in: Tips

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