NAB introduces HELP debt servicing changes

NAB will no longer consider Higher Education Loan Program (HELP) debt in home loan servicing if they owe $20,000 or less, effective from 31 July.

Matt Dawson, NAB’s executive for home ownership, said these changes will help get more first home buyers into the market.

However, he also recognised that supply remains a key challenge, calling on “collaboration across the board” to help address these issues.

Last month, APRA set a start date for its guidance on the servicing of HELP debt when assessing home loan applications, kicking off on 30 September 2025.

Back in February, APRA and ASIC began consulting on changes to lending rules to allow for those with student debt to responsibly take out a mortgage.

Following the announcement, banks have proactively begun implementing policy in anticipation of the September start date.

The Commonwealth Bank of Australia (CBA) introduced changes to how HECS-HELP debt is assessed on 9 April.

The major no longer considers HECS debt if it is due to be repaid within 12 months, and borrowers with a HECS debt due to be repaid within the next five years will be assessed using only a 1 per cent serviceability buffer.

Since the changes were implemented at CBA, a study found it grants borrowers 21.19 per cent more borrowing power.

For an eligible single applicant on a gross annual income of $55,000 with no dependents, the previous max borrowing capacity was $286,081. It is now $346,711, adding an additional $60,630 to borrowing capacity.

For an $80,000 gross annual income, customers gain an extra $80,468 in borrowing capacity and for a $100,000 income, an additional $105,667.

Home Loan Experts’ senior credit manager Binay Lama Pakhrin said that while the policy is fresh, the target market can benefit massively.

“The policy is very new and is still in the phase of getting traction. So right now there aren’t many visible success stories. Customers are still learning about it,” he said.

“While the policy might seem like it is focused towards a specific niche, many types of borrowers will benefit.”

Jack Campbell is the editor of Broker Daily. After graduating from the University of Wollongong in 2022, Jack began his journalistic career working on Broker Daily’s sister brand, HR Leader. In August 2023 he was made the news editor and worked alongside some talented journalists writing articles and recording podcasts.

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