Big Changes in HECS-HELP and Interest Rates 

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Penny
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What It Means for Women Buying Their First Home

It’s been a big few weeks for aspiring homeowners in Australia. First, the government and major banks announced a review into how HECS-HELP debts affect young graduates’ ability to secure a home loan. Then, the Reserve Bank of Australia (RBA) cut interest rates by 0.25%. But what do these changes really mean for women trying to break into the property market in 2025? 

The reality is, these updates bring both opportunities and challenges. Let’s break them down. 

How HECS-HELP Affects Your Borrowing Power 

If you (or your partner) have a HECS-HELP debt, you might have noticed it reduces your borrowing power when applying for a home loan. That’s because many banks treat HECS-HELP the same way they do unsecured loans, like credit cards or personal loans. 

What is changing

With the review into HECS-HELP debts and home loans, lenders may no longer count HECS-HELP as a liability in the same way. This could mean that HECS-HELP debt holders may find it easier to get a home loan or borrow more for their home. 

Why this matters for women: 

  • Women are more likely to have HECS-HELP debt due to higher university enrolment rates (59% in 2019), particularly in teaching, healthcare, and social services. 
  • Career breaks for maternity leave or caregiving mean repayments fluctuate, making it harder to budget for a mortgage. 
  • If banks adjust their lending criteria, borrowers (including women) may be assessed on their actual financial ability rather than penalised for carrying student debt. 

But there’s a catch…

Even if HECS-HELP is treated more fairly, it still won’t disappear from your borrower profile entirely. Banks will still to assess how much of your income goes toward repayments, which can still reduce borrowing power—especially for women in lower-paying fields or those with larger student debts. 

Interest Rates Are Dropping—Isn’t This a Good Thing?

The RBA’s recent 0.25% rate cut is designed to make borrowing more affordable. In theory, this should help first-home buyers by lowering mortgage repayments and making homeownership more attainable. 

Why this matters for women: 

  • Women typically earn less over their lifetimes due to the gender pay gap. Lower interest rates mean mortgage repayments become more manageable. 
  • For single women, a reduced rate could be the difference between being able to buy now versus waiting years to save a larger deposit. 
  • Women who have been waiting for the right time to enter the market might finally see an opportunity to act. 

But there’s a catch here too…

Lower interest rates can drive prices up. More buyers rush the market, which can lead to bidding wars and pushing prices higher—potentially wiping out the benefits of the rate cut. Some experts are predicting price increases in major cities like Sydney and Melbourne in the next cycle. 

For women, especially single-income earners, this could make it even harder to buy in competitive areas. But those who are open to alternative strategies like co-ownership or purchasing in regional areas where affordability is better can still find ways to enter the market in 2025. 

So, What Should Women Do Next? 

With all these changes (and more likely to come in an election year), it helps to plan strategically and take proactive steps. Here are some tips for navigating this changing landscape: 

  • Boost Your Savings: Even small increases in your savings can make a significant difference. Consider setting up automated savings or cutting non-essential expenses to build your deposit faster. 
  • Explore New Locations: If properties in major cities are too expenseive, look at emerging markets or regional areas where affordability may be better, but there is still room for growth.
  • Consider Joint Ownership or Co-Investment: If you’re buying on your own, consider options like co-ownership with a trusted friend or family member to increase your purchasing power without sacrificing your independence. 
  • Monitor Policy Updates: Stay up to date with changes to HECS-HELP assessment and lending criteria. Understanding these updates will help you plan better. 
  • Seek Professional Advice: Talk to a financial advisor or mortgage broker who understands the nuances of HECS-HELP and current market trends. They can help you come up with strategies that are right for you.

How Penny Can Help 

At Penny, we help women demystify the financial system, understand how policies like these may impact their borrowing power, and develop a clear plan for homeownership. Whether it’s navigating HECS-HELP repayments, preparing for interest rate shifts, or strategising to stay ahead in a competitive market, we’re here to support you. 

Join our community to gain expert insights, connect with like-minded women, and take control of your financial future. Because when women understand the system, they can navigate it better.  

Image source: Photo by Brooke Cagle on Unsplash