- Doctors
- Updated
- • 5 min read
HECS And Doctor Borrowing Capacity
Doctors are among the professionals most commonly affected by HECS. Medical degrees are typically 5–6 years and often accumulate significant HECS balances. As income rises after training, compulsory repayment rates also rise — which can affect home loan serviceability.
Quick Answer
HECS can significantly affect a doctor’s borrowing capacity. As income increases, compulsory HECS repayments increase — and lenders include these in their serviceability model, reducing how much can be borrowed.
HECS Impact At Different Income Levels
A doctor earning $150,000 may have a compulsory HECS repayment of $10,000–$15,000 per year depending on their balance and applicable rate. This translates to approximately $833–$1,250 per month counted as a committed expense by lenders — materially reducing borrowing capacity.
How Different Lenders Handle Doctor HECS
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Most lenders include compulsory HECS repayment in serviceability
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Some lenders use the ATO’s published repayment rates; others may vary
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Lender serviceability models differ, so outcomes can vary for the same income
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Registrars near the income threshold may have a lower HECS repayment rate
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Frequently Asked Questions
Should doctors pay off HECS before buying a home?
This depends on the balance, income, interest rate and savings. There is no universal answer.
Does HECS affect LMI waiver eligibility?
HECS does not directly affect LMI waiver eligibility, but it affects serviceability, which may affect the loan amount approved.
Why Locum Income Is Complex For Lenders
Medical degrees are among the most expensive in Australia. A doctor completing a 6-year MBBS may accumulate a HECS balance of $100,000+. At senior income levels, the compulsory repayment can reach $15,000–$20,000 per year.
Example: Doctor at $160,000
At $160,000 income, the compulsory HECS repayment rate is approximately 10%, giving a repayment of roughly $16,000 per year or $1,333 per month. This can reduce borrowing capacity by $150,000–$200,000 depending on the lender’s serviceability model.
Example: Registrar at $110,000
At $110,000, the repayment rate is approximately 8.5%, giving roughly $9,350 per year or $779 per month. The impact is still significant — potentially $100,000 or more in reduced capacity at typical assessment rates.
What Lenders May Look At
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HECS balance and applicable repayment rate
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Total committed liabilities
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Assessment rate buffer applied by lender
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Income shading policy for base vs overtime
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Do All Lenders Treat Doctor HECS The Same?
No. While most lenders use the ATO’s published rates, the overall serviceability buffer, income treatment and expense assumptions vary. A doctor with $120,000 HECS balance and $160,000 income can get materially different borrowing capacity outcomes across lenders.
Common Mistakes
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Not accounting for HECS when setting a target property price
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Assuming all lenders give the same borrowing capacity estimate
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Not comparing lenders specifically for HECS treatment
Should doctors pay off HECS before buying?
This depends on balance, interest, savings and time horizon. There is no universal answer.
Does HECS affect LMI waiver eligibility?
Not directly — but it affects serviceability and therefore the loan amount approved.
Review Your Doctor Borrowing Capacity
We compare lenders and assess HECS impact for your income level.
General information only. Lending eligibility, LMI waiver policies, rates and approval outcomes vary by lender and are subject to assessment.
Review Your Doctor Borrowing Capacity
We compare lenders and assess HECS impact for your income level.
General information only. Lending outcomes vary by lender and individual circumstances.