Question of the Week

Your home loan or your super?

Co-founder of the Switzer Super Report
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Key points
  • When interest rates are low, it’s usually better to put extra cash into super if you can salary sacrifice.
  • The downside is that you tie it up until your preservation age, which for most people is 60.
  • If you can’t salary sacrifice, it’s still better to put money in super over the mortgage if you’re confident you won’t need it and that the super fund’s performance will be higher than your mortgage rate.

“Your home loan or your super” is not like that old Andrew Denton TV program titled “Your money or your gun”, but rather the question I get asked almost as often as “where to invest”.

That is – I have some extra cash – so do I pay off my mortgage, or put the money into super?

And just before you tune out because, like many SMSF trustees, you have already paid off your home loan, the chances are that in your extended family, someone is paying off a mortgage.

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