The Big 4 Australian banks have agreed to review how university debt hinders young people from buying a home, after a personal request from Federal Treasurer Jim Chalmers.
Higher Education Loan Program (HELP) debt has long been cited as a key factor impacting how much young people in how are able to borrow from banks in order to buy a property but following Chalmers intervention, this looks set to change.
HELP debt repayments are tailored to income brackets, with a minimum salary of $54,435 needed in the 2024-2025 financial year before repayments begin, typically taken automatically out of pay checks on a percentage base.
Finspo, a digital mortgage broker, says that the maximum home loan borrowing power will reduce by around 10 times the value of annual HELP repayments.
The Treasurer confirmed in a press release on Tuesday night he spoke with financial regulators and had “convened the banks” to discuss further.
The discussions were held with APRA Chair John Lonsdale in November 2024 and ASIC Chair Joseph Longo in February 2025 and this week will extend to the CEOs of the major banks.
“Currently, a barrier for young Australians to get into the housing market is the reluctance of banks to give them a mortgage,” Chalmers wrote.
“People with a HELP debt should be treated fairly when they want to buy a house and we’re working with the regulators to make sure they are.”
The Treasurer also took aim at the Opposition leader Peter Dutton, saying that his “cuts to housing would mean fewer homes when Australia desperately needs more”.
In response, Shadow treasurer Angus Taylor hit back saying the proposed changes were nothing more than a “gentle letter” that provided “no new money, no new ideas and no new homes”.
"This underwhelming announcement is just a desperate attempt to look like the Albanese Government cares about young Australians who have suffered the most under Labor’s housing crisis," he said.
“Not a single first home buyer has bought a home through a Labor housing policy because Labor policies for first home buyers simply don't exist.”
