NAB follows CBA in home loan rule change, giving uni graduates, first-home buyers a break on student debt

National Australia Bank has become the latest lender to ignore some Higher Education Loan Program debt when assessing new home loans.

From July 31, NAB says if someone owes $20,000 or less in student debt, it won’t affect how much they can borrow should they take out a new loan with the big four banks.

This will help lift the borrowing capacity of a potential borrower, as banks consider income, liabilities and outstandings when calculating how much they will give a potential borrower.

NAB executive for home ownership Matt Dawson said the change would make a real difference for first-home buyers, especially.

“For too long, HELP debt has been a roadblock for many Australians looking to buy a home,” Mr Dawson said.

“NAB was pleased to advocate for this change last year, which will allow more people to turn their homeownership dreams into reality, faster.”

The NAB move is in line with the Commonwealth Bank, which in April said it would exclude HELP debt from home loan serviceability calculations on the basis the applicant could pay off their debt in the next 12 months.

CBA also said it was piloting plans for those who could pay off HELP loans over the next one to five years.

In February, student debt came into the spotlight when Treasurer Jim Chalmers told the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority (APRA) to update their guidance on how banks should treat student debts.

In June, APRA said the changes would come into effect from September 30 2025.

While NAB welcomed the move by the regulator to increase buying capacity for homebuyers by clarifying the treatment of HELP debt, Mr Dawson said housing supply remained the most significant challenge.

“It is critical to address both demand and supply-side measures together to help more Australians buy a home. There’s no simple fix, solving Australia’s housing challenges will take collaboration across the board.”

NAB’s move comes after the Albanese government announced changes to HELP debt on Wednesday.

In its first Bill since returning to office, the government plans to slash 20 per cent off three million graduates’ HELP debt.

This is the equivalent of $16bn in total relief, according to the government.

The move targets HELP debt, VET loans and apprenticeship loans.

Calculations released by the government show $5520 would be wiped off the average HELP debt of $27,600 if the legislation passes.

The changes would also raise the minimum threshold for student loans to be repaid from $54,000 to $67,000.