Find out more about whether you can use super to pay off your mortgage with Savvy today.
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If you’re wondering if you can use your super to pay off your mortgage you’ve come to the right place. Find out more about using your superannuation to pay off your home loan and whether it’s possible for you at your current age. Savvy can help you make informed decisions by comparing financial products and presenting comparison information side-by-side, giving you the tools to pick the best mortgage for your needs.
Whether you can use your superannuation to pay off your mortgage will depend completely on your age. If you’re past what’s called your super ‘preservation age’, the answer is yes, you can withdraw from your super account to pay off your mortgage. However, if you have not yet reached your preservation age, you won’t be permitted to use your super to pay your mortgage.
Your preservation age is the age at which you’re allowed to access your super (as long as you meet a condition of release). These conditions of release are rules which govern when you can access your super to pay off your mortgage (or for other reasons, such as reinvestment or to pay for a retirement holiday).
Your preservation age is determined by the year you were born in. If you were born before 1 July 1960, your preservation age is 55. In each year thereafter, the preservation age increases by one up to a maximum of 60 as follows:
Preservation age based on date of birth
| Date of birth | Preservation age |
|---|---|
|
Before 1 July 1960 |
55 |
|
1 July 1960 – 30 June 1961 |
56 |
|
1 July 1961 – 30 June 1962 |
57 |
|
1 July 1962 – 30 June 1963 |
58 |
|
1 July 1963 – 30 June 1964 |
59 |
|
From 1 July 1964 |
60 |
Your superannuation is divided into three categories, with the category your funds are in determining whether you can access them before your preservation age. In general, after you’ve reached your preservation age and satisfy a condition of release, you will be able to access all of your super to pay off your mortgage. If you’re still below your preservation age, you’ll only be permitted to access super funds which are unrestricted and non-preserved.
The three categories of superannuation are:
The condition of release you’ll be required to satisfy will be one of the following:
Yes, you can access your super before your preservation age in special circumstances. These are:
The compassionate grounds provision allows you to access your superannuation to prevent you from losing your home. If you are experiencing mortgage stress and are in danger of losing your home, you may be able to access your super on compassionate grounds to pay off your mortgage.
Age is the greatest restriction, because you can’t withdraw your super before your preservation age unless there are exceptional circumstances, as detailed above.
You should also think about Australia’s taxation laws if you’re above your preservation age, but below the age of 65 and still working. In these circumstances, if you do access your superannuation in a lump sum to pay off your mortgage, you may have to pay tax on it, which would reduce the benefit of accessing your super to pay off your mortgage.
There are no other restrictions to prohibit you from taking a lump sum out of your super to pay off your mortgage, but you should seek professional financial advice before making the decision to do so. Use Savvy’s lump sum calculator to work out how much interest you’ll save if you do pay off your mortgage this way.
If you’re in your 50’s or 60’s and approaching retirement age, your alternatives to using your super to pay off your mortgage include:
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
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© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.
For more information about us and how we conduct our business, you can read our privacy policy and terms of use.
