The Australian Prudential Regulation Authority (APRA) has begun consulting on proposed changes to how banks treat Higher Education Loan Program (HELP) debt repayments when assessing home loan applications.
In a bid to improve clarity for banks and borrowers on rules and guidance governing HELP repayments, the regulator wrote to banks on Thursday (20 February) seeking feedback on the following adjustments:
- Removing HELP debts from debt-to-income reporting.
- Clarifying that banks may exempt a loan applicant’s HELP debt from their serviceability assessment in cases where a borrower is expected to pay off their HELP debt in the near term.
Subject to feedback, APRA expects the final changes to be formally incorporated into APRA’s…