Comments from Peter White AM, managing director of the Finance Brokers Association of Australia

Re: New Commonwealth Bank (CBA) HECS-HELP debt serviceability changes

The Finance Brokers Association of Australia (FBAA) welcomes the CBA changes to assist people with HECS debt.

We also acknowledge the efforts of the Federal Government and in particular Treasurer Jim Chalmers, who in February instructed ASIC and APRA to update their guidance regarding the way Higher Education Loan Program (HELP) debts are treated by lenders.

While we understand that HECS is a debt and should be included in any loan assessment, the time left to repay the debt should be taken into consideration.

Furthermore, the reduction in the serviceability buffer for those who have between one and five years left on their repayments will be a significant help and enable many to not only reach the threshold to get a loan, but to secure a higher loan that may mean the difference between securing the property they seek, or missing out.

We urge other banks to do the same so that even more people who can afford a loan, can enter the market and increase their personal wealth.

To those with HECS debt who wish to find the best loan for their circumstances, I would encourage you to see a finance and mortgage broker. Only brokers are obligated to act in your best interests and they have many options to ensure you receive the right assistance.

The FBAA is an advocate for responsible lending but opposes policies that hinder people unnecessarily. For this reason our question to the government and to lenders is simply, if a 1 per cent serviceability buffer is viable for those with a HECS debt, why is a rate of 1.5 per cent to 2 per cent not viable for all borrowers?

The current 3 per cent mortgage serviceability buffer remains a key reason why thousands of Australians are unable to purchase a home or refinance, and we are talking about borrowers who can meet the repayments. We again call on the government to act on this.