Borrowing Power on $120,000 With HECS Debt
How much you can borrow on a $120,000 salary when you have HECS-HELP debt. See how compulsory repayments reduce your capacity.
Last verified: 5 May 2026On $120,000 with HECS debt, you could borrow approximately $337,314
Based on 9.25% assessment rate (6.25% + 3% buffer) and 30% serviceability ratio over 30 years.
HECS repayment of $9,000/year (7.5% rate) deducted from income before assessment. Without HECS, borrowing power would be $364,664 — a reduction of $27,350.
Monthly repayment
$2,076.90
at 6.25% over 30 years
Fortnightly repayment
$958.57
at 6.25% over 30 years
Weekly repayment
$479.28
at 6.25% over 30 years
What $337,314 Buys You
How your $337,314 borrowing power compares to median house prices across Australian capital cities (with a 20% deposit).
| City | Median | Loan needed (80%) | Affordable? |
|---|---|---|---|
| Sydney | $1,150,000 | $920,000 | Short $582,686 |
| Melbourne | $800,000 | $640,000 | Short $302,686 |
| Brisbane | $780,000 | $624,000 | Short $286,686 |
| Perth | $700,000 | $560,000 | Short $222,686 |
| Adelaide | $720,000 | $576,000 | Short $238,686 |
| Hobart | $650,000 | $520,000 | Short $182,686 |
| Canberra | $850,000 | $680,000 | Short $342,686 |
| Darwin | $500,000 | $400,000 | Short $62,686 |
Median prices are approximate mid-2025 figures. Actual prices vary by suburb.
Deposit Needed
How much deposit you need for different property values with $337,314 borrowing power.
| Deposit % | Max property | Deposit | Est. LMI |
|---|---|---|---|
| 5% | $355,067 | $17,753 | $11,806 |
| 10% | $374,793 | $37,479 | $6,072 |
| 20%(no LMI) | $421,643 | $84,329 | $0 |
LMI estimates are approximate. Actual LMI varies by lender, loan amount, and LVR.
Monthly Repayments at Current Rates
| Rate | Monthly | Fortnightly | vs 6.25% |
|---|---|---|---|
| 5.5% | $1,915.23 | $883.95 | -$161.67/mo |
| 6% | $2,022.37 | $933.40 | -$54.53/mo |
| 6.25%(current) | $2,076.90 | $958.57 | — |
| 6.5% | $2,132.05 | $984.03 | +$55.15/mo |
| 7% | $2,244.16 | $1,035.77 | +$167.26/mo |
| 7.5% | $2,358.55 | $1,088.56 | +$281.65/mo |
What Reduces Your Borrowing Power
Credit card ($10K limit)
Banks assume 3% of your credit limit as a monthly commitment, even if paid in full
-$36,466
Car loan ($500/month)
Existing debt repayments directly reduce serviceability
-$60,777
Each dependant
Banks add ~$400/month per dependant to living expenses
-$48,622
How to Increase Your Borrowing Power
- Pay off debts first — closing a $10K credit card could add $36,466 to your borrowing power
- Save a bigger deposit — a 20% deposit avoids LMI (saving $11,806) and shows lenders you're a lower risk
- Longer loan term — a 35-year term increases borrowing power to approximately $345,689 ($8,375 more)
- Add a co-borrower — combining incomes significantly increases capacity
- Reduce living expenses — lower declared expenses mean more income available for repayments
- Pay off HECS voluntarily — removing the $9,000/year repayment would add $27,350 to your borrowing power
Lenders Mortgage Insurance (LMI)
LMI is required when your deposit is less than 20% of the property value. Here's what you'd pay on a $337,314 loan:
5% deposit (95% LVR)
$11,806
on $355,067 property
10% deposit (90% LVR)
$6,072
on $374,793 property
15% deposit (85% LVR)
$2,699
on $396,840 property
LMI can often be added to the loan (capitalised), but this increases your total debt. First home buyers may be eligible for the First Home Guarantee which allows a 5% deposit with no LMI.
Frequently Asked Questions
How much can I borrow on $120,000 with HECS?
On $120,000 with a HECS-HELP debt, your borrowing power is approximately $337,314. The compulsory HECS repayment of $9,000/year (7.5% of income) reduces your borrowing capacity by approximately $27,350 compared to someone without HECS.
Does HECS affect borrowing power?
Yes. Banks deduct your compulsory HECS repayment from your income before calculating serviceability. On $120,000, your HECS repayment of $9,000/year reduces your effective income to $111,000, lowering your maximum loan by approximately $27,350.
Should I pay off HECS before buying a house?
Paying off HECS before buying would increase your borrowing power by approximately $27,350. However, HECS is indexed at CPI (not a real interest rate), so the money might be better used as a larger deposit to avoid LMI. It depends on your deposit savings and the property you're targeting.
Other HECS Salaries
Compare Scenarios
Related Tools
Sourced from
1 primary source- RBA-Cash-RateRBA StatementRBA cash rate target
Cash rate target set by the RBA Board. Mortgage rates broadly track cash rate movements. Last verified rate baked into mortgage and offset calculators is the most recent published target.
General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.