The affect of a HECS debt on your borrowing power

New figures show that paying off a HECS loan may significantly reduce a graduate’s borrowing power for a mortgage, with a potential impact of almost $100,000. Graduates on salaries of $125,000, $100,000, and $75,000 could see their borrowing capacity reduced by $95,900, $56,300, and $26,800 respectively due to their HECS debt. This is because banks consider a mortgage applicant’s debt-to-income ratio before lending money, and indexation levels on HECS debts have been increasing annually.

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