06/11/2025
“Should I pay off extra onto my home loan or salary sacrifice into superannuation”
I posted this reel over a year ago and it was popular so thought I’d reshare again as I’m getting this question again. (note the interests rate I was using was higher? If the average longer term interest rate was lower than 6.2% than this would make the outcomes look even stronger)
I get a variation of this question ALL the time and the answer is;
✨ iT dEpEnDs ✨
It depends on:
👉🏼 your goals
👉🏼 intention for the property
👉🏼 plans for retirement
👉🏼 risk profile & comfort levels
👉🏼 income & tax rates
However superannuation can be a powerful tool in your wealth building plan so let me show you how it can help amplify your wealth!
⚠️ Please note this is general advice- this is a very simple fictional case study. Even if you match the profiles of this case study I have simplified it a lot!! ⚠️
Assumptions:
👭 couple both 40 years old
💰 earning $150k & $100k, wage growth 1.7%
💸 mortgage $700k @6.2% interest, 30 year term
🍯 superannuation balances $180k & $200k earning around 7% a year
🚀 Surplus $2,500 per month
Option 1: focus on directing surplus to the mortgage first. Then once home loan is paid off, directing into superannuation as salary sacrifice (would get about 8 years of salary sacrifice).
This strategy means they are saving around $540k in interest by repaying the home loan in 12 years instead of 30.
Option 2; continue paying minimum mortgage repayments, focus on salary sacrificing to the cap & then at retirement draw a lump sum from super to clear the home loan
This second option means their superannuation & networth is over $290k higher in today’s dollars compared to option 1.
And even at 90 years old, their superannuation is worth over $620k more than option 1 due to continued compound growth (assumed retirement spending $100k a year).
I’ll post the carousel of these projections tomorrow to help visualise (so make sure you follow for the next post) and if you found this helpful don’t forget to share!!
