The mechanism: it's an income haircut
When a lender assesses a home loan, the core question is how much income remains after your commitments. Compulsory HELP repayments come straight out of that income: at $100,000 of repayment income in 2026-27, that's $4,571 a year (see the full thresholds table). To a serviceability model, that's equivalent to losing the same amount of salary, which at typical assessment settings can translate to tens of thousands of dollars of borrowing capacity.
Note what a HELP debt is not: it isn't on your credit report, it has no missed-payment risk in the conventional sense, and repayments stop automatically if your income falls below the threshold. It's the repayment flow, not the balance, that lenders price in.
The repayment the lender sees, by income (2026-27)
Lenders work in monthly figures. This is the compulsory HELP repayment at four repayment incomes, converted to the monthly amount a lender counts against you, with and without the APRA 12-month exclusion:
| Repayment income | Gross per month | Annual HELP repayment | Monthly HELP the lender counts | Share of gross income | If the debt clears within ~12 months |
|---|---|---|---|---|---|
| $70,000 | $5,833 | $71 | $6 | 0.1% | Lender may count $0 |
| $90,000 | $7,500 | $3,071 | $256 | 3.4% | Lender may count $0 |
| $120,000 | $10,000 | $7,571 | $631 | 6.3% | Lender may count $0 |
| $150,000 | $12,500 | $12,476 | $1,040 | 8.3% | Lender may count $0 |
Monthly HELP is the ATO 2026-27 compulsory repayment divided by 12. How a given lender turns that into a borrowing limit (buffers, living expenses, tax) is its own policy and isn't modelled here. Without HELP, the "monthly HELP" column is $0 at every income.
The pattern: at $90,000 a lender deducts about $256 a month; at $150,000 it is $1,040, or 8.3% of gross income, because more of the income sits above the threshold and the rate rises from 15c to 17c per dollar above $129,717. Just over the $69,528 threshold the deduction is negligible. The balance doesn't appear anywhere in the calculation except in the last column: a small balance is what unlocks the 12-month exclusion.
What changed in 2025
In 2025 the government directed the regulators to stop HELP debts being treated like ordinary loans, and APRA's updated guidance took effect from 30 September 2025. Two changes matter for borrowers:
- Out of the DTI figures. HELP debts no longer count in the debt-to-income ratios banks report to APRA, recognising their income-contingent nature. This mostly removes a reporting constraint on lenders rather than changing your assessment directly.
- The 12-month exclusion. Lenders may exclude HELP repayments from serviceability where the debt is expected to be fully repaid within about 12 months. If your balance is down to its last year of payroll deductions, a lender can assess you as if it were already gone. Outside that case, regulators still expect the repayments to be counted.
What clearing the debt changes
Paying out a HELP debt restores the repayment amount to your assessable income and stops the payslip deductions, which lifts both borrowing capacity and take-home pay. Whether that beats keeping the cash as a deposit is a genuine trade-off: deposit size drives your loan-to-value ratio, and lenders' treatment varies. Before deciding anything, know your own numbers: your payoff date under compulsory repayments alone (our HECS repayment calculator projects it), and the timing rules in our voluntary repayments guide if you do pay early. What's right for your loan is a question for your lender or broker: general information here, not financial or credit advice.
The moving parts in one list
- Your repayment income sets the annual repayment that lenders subtract. Remember it can be higher than salary if you salary package or negatively gear (see what counts as repayment income).
- Your balance sets how long those repayments last, and whether the 12-month exclusion can apply.
- The 20% reduction and low indexation mean many balances are smaller than their owners think. Check yours in ATO online services before assuming.
- Lender policies differ. Regulator guidance sets the boundaries; individual lenders choose where inside them to stand.
Sources
Figures on this page come from the following primary sources. The date is when we last checked the page against the source.
- Clarifying the treatment of HELP debt obligations (APRA), checked 6 August 2026.
- Study and training support loans rates and repayment thresholds (ATO), checked 27 July 2026.
Related
HECS repayment calculator: your repayment and payoff date. Voluntary HECS repayments: why paying before 1 June matters if you decide to pay down. Take-home pay calculator: how income changes flow through tax, Medicare and HECS.
Figures current as at 5 October 2026. Repayment figures verified against ATO thresholds; regulatory treatment per APRA's "Clarifying the treatment of HELP debt obligations" guidance (effective 30 September 2025); see our methodology. General information only, not financial, tax or credit advice.