‘Crocodile tears': Home loan change could add to worsening housing crisis
It's now easier for Australians to buy a home, but a key change to credit limits could push up the price of housing, a leading economist warns.
The Australian Prudential Regulation Authority (APRA) announced on Thursday that Higher Education Loan Program (HELP) debts would be excluded from the credit limit for prospective homebuyers from September 30.
Independent economist Saul Eslake told NewsWire that the change's two most obvious effects would be to 'allow some people who'd buy a home anyway to buy a more expensive one and (to) allow some people who wouldn't have been able to buy a home because of their student debt' to do so'.
'The net effect of those two factors will be to increase the demand for housing,' he said.

'The likely result is that it will, along with other things that governments are doing, put further upward pressure on the prices of property.'
Mr Eslake said the change meant some people would be able to enter the housing market more quickly than otherwise but 'it would come at the expense of others'.
'The primary beneficiaries of this change will be those who will already own property will be able to sell it to people at higher prices than otherwise,' he said.
'That's consistent with the 60 years of evidence that we have, going back to the first homeowners grant scheme introduced by the Menzies government in 1964 that tells us that anything that allows Australians to pay more for housing than they'd be able to otherwise results in more expensive housing and a smaller proportion of the population owning it.'
Mr Eslake added it was 'obvious' the money saved on HELP debt cuts would now be going towards a more expensive house.
'The reason that governments keep doing these things despite the evidence and despite all of the crocodile tears they routinely share about the difficulties faced by would-be first-home buyers is because they know that there actually aren't very many of them,' Mr Eslake said. 

'On average, 110,000 a year, whereas there are 11 million people who own their own home. There are 2¼ million who own at least one investment property. That's an awfully much bigger number of votes for policies that keep house prices going up than there are for policies that might restrain the rate at which house prices keep going up.'
Mr Eslake said the reason the housing crisis continued to worsen was 'because a majority of the population do not want it to be solved and politicians know that'. 

'Until enough people my age, either out of an altruistic concern for the ability of their children and grandchildren to be able to do what they did, or perhaps more likely out of being pissed off at having to be the bank of mum and dad, until enough of them really want that to change, it isn't going to change.'
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The Advertiser
5 hours ago
- The Advertiser
If you're going for a home loan but still have a HECS debt, you might want to wait
People with outstanding student loans will have an easier time getting a mortgage from September, when new lending rules will take effect. Banks will be able to disregard higher education loan program (HELP) debts, which include HECS debt, when assessing a homebuyer for a mortgage. The changes were finalised this week, after the Albanese government made a pre-election pledge in February to level the playing field for people with student debts. The Australian Prudential Regulation Authority has advised banks to remove HELP debt from debt-to-income reporting, a metric used to determine a person's capacity to repay a mortgage. The regulator has also clarified that it may be reasonable for banks to completely disregard a person's HELP debt from serviceability assessments, where it's expected the loan will be paid off within 12 months. Treasurer Jim Chalmers said the changes would make lending rules fairer. "We're making sure young people with a HELP debt are treated fairly and supporting them to get into the property market," he said. The changes mean a dual-income household with two student debts could borrow an additional $50,000 in the year they expect to pay off their student loan, according to the government's own analysis. APRA has written to lenders and the industry to advise them of the changes and their new obligations. The revised standards for banks will come into effect on September 30, 2025. In its letter to lenders, APRA said the changes would provide regulatory clarity and reaffirm the flexibility banks had in considering borrowers' individual circumstances. The regulator expects the changes will allow some borrowers with student debts to secure a home loan sooner. Education Minister Jason Clare said the Universities Accord found that banks' assessments of student debt made it harder for young Australians to buy a home. "HECS was never meant to be a handbrake on owning a home," he said. "That's not fair and we're fixing it." The federal government will also move ahead with its plan to reduce student debts by 20 per cent, something it committed to before the May election. During the election campaign, Prime Minister Anthony Albanese promised the legislative changes would be his first priority if his government was to be re-elected. The government has reaffirmed this, saying it will be the first piece of legislation introduced when Parliament returns on July 22, 2025. The 20 per cent reduction will occur once the legislation passes Parliament. However, the government has clarified the discount will be calculated based on a person's HELP debt amount as at June 1, 2025, before indexation was applied. This means the 2025 indexation will only apply to the remaining balance after the 20 per cent reduction. People with outstanding student loans will have an easier time getting a mortgage from September, when new lending rules will take effect. Banks will be able to disregard higher education loan program (HELP) debts, which include HECS debt, when assessing a homebuyer for a mortgage. The changes were finalised this week, after the Albanese government made a pre-election pledge in February to level the playing field for people with student debts. The Australian Prudential Regulation Authority has advised banks to remove HELP debt from debt-to-income reporting, a metric used to determine a person's capacity to repay a mortgage. The regulator has also clarified that it may be reasonable for banks to completely disregard a person's HELP debt from serviceability assessments, where it's expected the loan will be paid off within 12 months. Treasurer Jim Chalmers said the changes would make lending rules fairer. "We're making sure young people with a HELP debt are treated fairly and supporting them to get into the property market," he said. The changes mean a dual-income household with two student debts could borrow an additional $50,000 in the year they expect to pay off their student loan, according to the government's own analysis. APRA has written to lenders and the industry to advise them of the changes and their new obligations. The revised standards for banks will come into effect on September 30, 2025. In its letter to lenders, APRA said the changes would provide regulatory clarity and reaffirm the flexibility banks had in considering borrowers' individual circumstances. The regulator expects the changes will allow some borrowers with student debts to secure a home loan sooner. Education Minister Jason Clare said the Universities Accord found that banks' assessments of student debt made it harder for young Australians to buy a home. "HECS was never meant to be a handbrake on owning a home," he said. "That's not fair and we're fixing it." The federal government will also move ahead with its plan to reduce student debts by 20 per cent, something it committed to before the May election. During the election campaign, Prime Minister Anthony Albanese promised the legislative changes would be his first priority if his government was to be re-elected. The government has reaffirmed this, saying it will be the first piece of legislation introduced when Parliament returns on July 22, 2025. The 20 per cent reduction will occur once the legislation passes Parliament. However, the government has clarified the discount will be calculated based on a person's HELP debt amount as at June 1, 2025, before indexation was applied. This means the 2025 indexation will only apply to the remaining balance after the 20 per cent reduction. People with outstanding student loans will have an easier time getting a mortgage from September, when new lending rules will take effect. Banks will be able to disregard higher education loan program (HELP) debts, which include HECS debt, when assessing a homebuyer for a mortgage. The changes were finalised this week, after the Albanese government made a pre-election pledge in February to level the playing field for people with student debts. The Australian Prudential Regulation Authority has advised banks to remove HELP debt from debt-to-income reporting, a metric used to determine a person's capacity to repay a mortgage. The regulator has also clarified that it may be reasonable for banks to completely disregard a person's HELP debt from serviceability assessments, where it's expected the loan will be paid off within 12 months. Treasurer Jim Chalmers said the changes would make lending rules fairer. "We're making sure young people with a HELP debt are treated fairly and supporting them to get into the property market," he said. The changes mean a dual-income household with two student debts could borrow an additional $50,000 in the year they expect to pay off their student loan, according to the government's own analysis. APRA has written to lenders and the industry to advise them of the changes and their new obligations. The revised standards for banks will come into effect on September 30, 2025. In its letter to lenders, APRA said the changes would provide regulatory clarity and reaffirm the flexibility banks had in considering borrowers' individual circumstances. The regulator expects the changes will allow some borrowers with student debts to secure a home loan sooner. Education Minister Jason Clare said the Universities Accord found that banks' assessments of student debt made it harder for young Australians to buy a home. "HECS was never meant to be a handbrake on owning a home," he said. "That's not fair and we're fixing it." The federal government will also move ahead with its plan to reduce student debts by 20 per cent, something it committed to before the May election. During the election campaign, Prime Minister Anthony Albanese promised the legislative changes would be his first priority if his government was to be re-elected. The government has reaffirmed this, saying it will be the first piece of legislation introduced when Parliament returns on July 22, 2025. The 20 per cent reduction will occur once the legislation passes Parliament. However, the government has clarified the discount will be calculated based on a person's HELP debt amount as at June 1, 2025, before indexation was applied. This means the 2025 indexation will only apply to the remaining balance after the 20 per cent reduction. People with outstanding student loans will have an easier time getting a mortgage from September, when new lending rules will take effect. Banks will be able to disregard higher education loan program (HELP) debts, which include HECS debt, when assessing a homebuyer for a mortgage. The changes were finalised this week, after the Albanese government made a pre-election pledge in February to level the playing field for people with student debts. The Australian Prudential Regulation Authority has advised banks to remove HELP debt from debt-to-income reporting, a metric used to determine a person's capacity to repay a mortgage. The regulator has also clarified that it may be reasonable for banks to completely disregard a person's HELP debt from serviceability assessments, where it's expected the loan will be paid off within 12 months. Treasurer Jim Chalmers said the changes would make lending rules fairer. "We're making sure young people with a HELP debt are treated fairly and supporting them to get into the property market," he said. The changes mean a dual-income household with two student debts could borrow an additional $50,000 in the year they expect to pay off their student loan, according to the government's own analysis. APRA has written to lenders and the industry to advise them of the changes and their new obligations. The revised standards for banks will come into effect on September 30, 2025. In its letter to lenders, APRA said the changes would provide regulatory clarity and reaffirm the flexibility banks had in considering borrowers' individual circumstances. The regulator expects the changes will allow some borrowers with student debts to secure a home loan sooner. Education Minister Jason Clare said the Universities Accord found that banks' assessments of student debt made it harder for young Australians to buy a home. "HECS was never meant to be a handbrake on owning a home," he said. "That's not fair and we're fixing it." The federal government will also move ahead with its plan to reduce student debts by 20 per cent, something it committed to before the May election. During the election campaign, Prime Minister Anthony Albanese promised the legislative changes would be his first priority if his government was to be re-elected. The government has reaffirmed this, saying it will be the first piece of legislation introduced when Parliament returns on July 22, 2025. The 20 per cent reduction will occur once the legislation passes Parliament. However, the government has clarified the discount will be calculated based on a person's HELP debt amount as at June 1, 2025, before indexation was applied. This means the 2025 indexation will only apply to the remaining balance after the 20 per cent reduction.
News.com.au
6 hours ago
- News.com.au
‘Had to wait': TikToker's horror ING ordeal
A Melbourne woman was left without money for two days after ING suspended her account for what they deemed to be 'suspicious activity'. In an ordeal that has left her switching banks, Katie McMaster posted to TikTok after being left without access to her card and unable to withdraw money due to a flag on her account. She said she was initially sent an email on Tuesday, telling her that her accounts had been suspended and she needed to verify her identity. Ms McMaster called ING to verify the email was legit, where she was told she would need to wait up to two days for the fraud team to get back to her. 'They said I need to wait for the fraud team to contact me. I can't speak to them, they wouldn't transfer me to them, I had to wait for them to email me,' she said in the video. After two days – and calling ING multiple times – Ms McMaster finally had her accounts unsuspended. She said the fraud team told her there was just 'one person' managing the fraud inbox. Speaking to Ms McMaster said the 'suspicious activity' turned out to be a transfer with her friend for payment of a Usher ticket. 'I don't know if my TikTok helped, but suddenly, they moved pretty quickly,' she said. Ms McMaster said the verification process as a whole did not feel secure. 'They're sending you emails but then when you ring them and you're on hold, they say ING will never ask you to provide verification via email,' she said. She also said she did not have the option to go into a branch, as there are none in Melbourne. 'It was frustrating just waiting, I probably wouldn't have minded so much if they kept me in the loop,' she said. Ms McMaster said she is now moving banks after being with ING for more than a decade due to the ordeal, with many users on TikTok commenting about similar experiences. A spokeswoman for ING said the bank does place temporary 'holds' on an account if the bank detects 'suspicious transactions'. 'This often involves temporarily placing a hold on a customer's account until we can confirm the transactions with the customer,' she said. 'We recognise that temporarily pausing activity on an account can impact customers, so we always check they have access to essential funds, ensuring they are not placed in financial hardship.'
Canberra Times
7 hours ago
- Canberra Times
If you're going for a home loan but still have a HECS debt, you might want to wait
The regulator has also clarified that it may be reasonable for banks to completely disregard a person's HELP debt from serviceability assessments, where it's expected the loan will be paid off within 12 months.
