CBA Changes the Game: How New HECS/HELP Assessment Policies Could Boost Your Borrowing Power

In a welcome shake-up to how student loan debt is assessed in home loan applications, CBA (Commonwealth Bank of Australia) has announced changes that could significantly boost the borrowing capacity of many Australians—especially first home buyers with HECS/HELP debt. Here's what’s changing, how it works, and how it might impact you.

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The Old Way: A One-Size-Fits-All Approach

Historically, lenders treated your HECS/HELP debt as a long-term liability, regardless of how much time you had left on it. Even if you were a year away from paying it off, your loan application was assessed as if that repayment would be ongoing indefinitely. This often reduced your borrowing capacity significantly, despite not reflecting financial reality.

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The Change: A Two-Tiered Assessment Policy

CBA has introduced a more nuanced way of evaluating HECS/HELP repayments by looking at your repayment timeline. There are now two key pathways:

1. Repayment Within 12 Months = HECS Ignored

If your current assessed income shows that your entire HECS/HELP debt will be repaid within the next 12 months, CBA will exclude your HECS liability from serviceability calculations.

• Real Example:

A single applicant earning $100,000/year with HECS and no other debt saw their borrowing capacity rise from $468,000 to $525,000 when HECS was excluded. That’s a $57,000 increase—just for having less than a year of repayments left.

2. Repayment Within 5 Years = Reduced Assessment Buffer

If you’re expected to repay your HECS/HELP debt within 5 years, CBA will reduce the servicing buffer from 3% to 1%. Normally, lenders add a 3% buffer to interest rates to assess your ability to afford future rate increases. A 6% loan is assessed as if it’s 9%.

With this new policy:

• Your loan is assessed at 7% instead of 9%.

• Your HECS is still included, but the impact is significantly reduced.

• Real Example:

Using the same applicant above, their borrowing capacity jumped from $468,000 to $567,000—a $99,000 boost—when the 1% buffer was applied.

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Why This Matters

• It rewards people who are close to clearing their HECS balance.

• It dramatically increases the borrowing power for many first home buyers.

• It opens up better property options and avoids unnecessary compromise.

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The Fine Print

• These changes are based on assessed income, not actual earnings—so talk to a broker to confirm your eligibility.

• Non-bank lenders may still offer higher borrowing capacities through other mechanisms (like smaller buffers), but CBA’s policy change now brings major bank lending into a more competitive space.

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Final Thoughts

These changes, especially the 5-year assessment pathway, are a big deal for anyone with HECS/HELP debt. If you haven’t reviewed your borrowing power recently, now’s the time.

Got questions? Let’s chat. I can help assess where you stand and what options are newly available to you.