Obtaining a home loan when you have student debt

Friday 30 October, 2020

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!

You might also like...

Finance Brokers Tasmania Hobart Team 10

The loan process equation (or, how much can I borrow?)

When applying for a loan, you’ll hear terms such as “borrowing power”, “borrowing capacity”, and “assessment rate”. But how do they relate? What do they mean? We’ll break it down for you in a simple equation.

Finance Brokers Tasmania Loan calculators

Loan calculators

During your research into your financial situation, you may have clicked on our calculator section – and been overwhelmed with the number of different types available! What do they all mean and what are they used for?!

Fbt government building grants

Government building grants – an October 2021 update

Homebuyers, builders, and renovators take note! You may be eligible for a government incentive to help you with your dream home.

Fbt secured vs unsecured loans

Secured vs. unsecured loans for small businesses

If you’re one of the 37,000 small businesses in Tasmania, you may be looking at obtaining finance to grow your business.