The MFAA welcomes the announcement from the Treasurer, the Hon. Jim Chalmers, that APRA and ASIC will update their guidance on the treatment of HECS-HELP student loan debts when it comes to home loan applications.
MFAA CEO Anja Pannek said it was great to see the government moving to adopt the sensible recommendation made by the peak industry body to the Senate Inquiry into the Financial and Regulatory Framework and Home Ownership in September 2024.
“This announcement is one of the key recommendations we made to the inquiry. Our members were very vocal when we consulted with them that this was one of the key barriers for prospective homeowners,” Ms Pannek said.
“Our members are at the coalface working with their clients every day and helping them. We all know 75% of all mortgages go through brokers, however importantly also nearly 80% of first home buyers turn to brokers for help to buy their first home.
“We surveyed our members and the message from them was clear – the rules governing HECS-HELP debt when it comes to home loans were prohibitive to first home buyers entering the market and needed to change.
“In reflecting our members’ views, our submission called on the Government to adjust the way in which student loans debt was treated for first home buyers.
Ms Pannek said updates to the guidance regulators apply to HECS-HELP will remove arbitrary barriers to serviceability for aspiring homebuyers, providing more certainty to lenders in the treatment of student loans, and therefore increasing the opportunity for mortgage brokers to help more clients into homes.
The MFAA CEO went on to note there were further opportunities to improve home ownership opportunities for Australian first home buyers.
“We will continue, amongst other things, to advocate for greater flexibility in the serviceability buffer and to encourage simplification of government home ownership schemes across both state and federal levels,” Ms Pannek said.
You can read the MFAA’s recommendation regarding HECS-HELP debt in our submission here: Submission reinforces importance of mortgage brokers for homebuyers
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