Student Loans Significantly Reduce Borrowing Power for Mortgages

‘The higher income earners could be more restricted by their HECS debt than lower income earners,’ David Koch said.

A man walks past a bank advertising home loans in Melbourne, Australia, on Feb. 7, 2023. William West/AFP via Getty Images

HECS debt could reduce borrowing power for a mortgage, according to new research from Compare the Market.

The research found that a university student on an annual salary of $125,000 (US$80,800) with a student debt of $26,500 had a reduced borrowing capacity of $95,900.