Treasurer Jim Chalmers is expected to announce modifications today that will make HECS debts less of an obstacle for individuals seeking home loans. Currently, banks consider student loan debt when assessing applicants, even though repayments are only triggered at specific income thresholds, which are adjusted annually. However, according to a report from the Australian Financial Review, banks will be permitted to disregard HECS debts during mortgage serviceability assessments if they believe the applicant can pay off the debt in the near future. This aligns with the Australian Prudential Regulation Authority’s decision to exclude HECS from their debt-to-income calculations, which influences loan eligibility.
This development is part of a wider political landscape concerning housing affordability, an issue that resonates with voters; a recent 9News poll indicated that 73% of respondents deemed it important in their voting decisions. While the Coalition proposes allowing access to superannuation for home purchases, the Labor government has initiated a $10 billion Housing Australia Future Fund aimed at expanding public housing. The property market remains buoyant despite some softening in major cities, and many homeowners are anticipating a potential interest rate cut from the Reserve Bank of Australia, which could ease financial pressures for voters and benefit the Albanese government.