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Mawer Money: with Greg Mawer

Jo Eaton

Proposed easing of mortgage lending restrictions for people with Higher Education Loan Program (HELP) debts


26 March 2025

 

The Government recently announced that financial regulators will update their guidance to make it easier for Australians with a HELP debt to responsibly take out a mortgage and buy a home, and also unlock the construction of more units, following a request from the Albanese Government.


"People with a HELP debt should be treated fairly when they want to buy a house and we're working with the regulators to make sure they are."


Currently, a barrier for young Australians to get into the housing market is the reluctance of banks to give them a mortgage.


The Australian Banking Association has indicated that one reason for this uncertainty is the interpretation of lending regulations and guidance by APRA and ASIC.


The Government noted that both APRA and ASIC have advised they will assist: "APRA has

confirmed it will start consultation soon on the treatment of HELP debts in serviceability

requirements and debt reporting."


"ASIC has confirmed it will move to quickly implement changes to its guidance on the

treatment of HELP debts, following targeted consultation."


The Government has also asked APRA to update and clarify its regulatory guidance to help unlock the construction of more units.


Some lenders have interpreted advice issued by APRA in 2017 that finance for construction of new unit blocks should depend on all properties being pre-sold. Lenders have indicated this is a barrier to financing.


The interpretation of this guidance as "100% pre-sales" by some lenders has limited housing supply, as smaller developers often do not have the capital to finance the start of construction without support from the banks.


"APRA has confirmed it will communicate to banks that, while it expects banks to consider the extent of presales as part of prudent credit risk management, APRA does not expect 100% pre-sales."


"ASIC has confirmed it will move to quickly implement changes to its guidance on responsible lending laws."


Ref: Treasurer's Joint Media Release, 'Commonsense changes to help more Australians into a home', 12 February 2025


Source: Greg Mawer

 
 
 

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