Student Loan Debt? Here's How to Buy a Home Fast (2026)

Juggling student loan debt while dreaming of home ownership can feel like an uphill battle. If you're wondering, "Can I purchase a home with student loan debt?" you're not alone. Many Australians face this dilemma, and the good news is, yes, it is possible. With the right strategy and guidance, you can balance your student loans and achieve your home ownership goals.

Understanding Home Buying with Student Loan Debt

Before diving into the specifics, it's essential to understand how student loans affect your home buying potential. Student loans are a form of debt, and like any other debt, they impact your credit score and debt-to-income ratio (DTI), both of which are crucial factors in a lender's decision-making process. In Australia, lenders typically prefer a DTI ratio below 6, meaning your total debts should not exceed six times your annual income.

Your ability to repay your student loans consistently and on time contributes positively to your credit score. A strong credit score can help you secure better interest rates and terms on your home loan, making it easier to manage both debts.

Current Market Information and Options

In 2026, the Australian housing market remains competitive, with interest rates for home loans ranging between 6.49% and 8.79%. Lenders assess various factors, including your income, credit history, and existing debts, to determine your eligibility and the terms of your loan.

With over 83 lenders on Esteb and Co's panel, potential homeowners have a wide range of options. Some lenders may offer more flexibility in their lending criteria, considering the nuances of student loan debt.

Steps to Buying a Home with Student Loan Debt

Here are practical steps to help you navigate buying a home while managing student loan debts:

1. Assess Your Financial Situation: Calculate your DTI ratio and ensure it aligns with lender expectations. Aim for a lower DTI by increasing income or reducing debt.
2. Improve Your Credit Score: Pay your student loans and other debts on time. Consider paying down debt to lower your DTI.
3. Save for a Deposit: A larger deposit can improve your loan terms. Aim for at least 10% of the property value.
4. Research Lenders: With Esteb and Co's access to 83+ lenders, compare different loan options to find one that accommodates your unique financial situation.
5. Seek Pre-Approval: Obtain pre-approval to understand how much you can borrow. This will guide your property search and strengthen your offer when you find the right home.
6. Consult a Mortgage Broker: An experienced mortgage broker can provide tailored advice and help you navigate lender requirements, making the process smoother.

Tips and Considerations

Consider Loan Features: Look for features like offset accounts or redraw facilities that can help manage your mortgage more efficiently.

Stay Informed: Keep up-to-date with market trends and interest rate changes. This knowledge can help you time your purchase better and secure favourable loan terms.

Plan for Future Expenses: Homeownership comes with additional costs like maintenance and repairs. Ensure your budget accounts for these expenses without compromising your debt repayments.

Use Professional Guidance: Leverage the expertise of Esteb and Co's mortgage brokers to explore a wide range of loan options, ensuring you find the best fit for your needs.

Frequently Asked Questions

Q1: Can student loan debt prevent me from getting a mortgage? While student loan debt is a factor, it doesn't automatically disqualify you. Lenders consider your overall financial health, including your income, DTI ratio, and credit score.

Q2: How can I improve my chances of getting approved for a mortgage? Focus on reducing your DTI ratio, improving your credit score, and saving for a larger deposit. These steps can enhance your loan application.

Q3: Are there specific lenders that are more lenient with student loan debt? Yes, some lenders on Esteb and Co's panel may offer more flexibility. A mortgage broker can help identify these lenders and the best options for your situation.

Q4: Should I pay off my student loans before buying a house? It depends on your financial situation. Paying off high-interest student loans can be beneficial, but if your DTI ratio is manageable, you may pursue both goals concurrently.

Q5: How does an offset account help with my mortgage? An offset account reduces the interest payable on your mortgage, potentially saving you money over the loan term. This can be particularly beneficial when managing multiple debts.

Q6: What is the minimum deposit required for a home loan? The minimum deposit varies by lender, but generally, you should aim for at least 5-10% of the property value for a stronger application.

Q7: Can I refinance my student loans to improve my mortgage eligibility? Refinancing can lower your student loan payments, improving your DTI ratio, but it's vital to ensure the new terms are favourable before proceeding.