Salary sacrifice to super beats mortgage payments by $7,330 over 10 years
For a 55-year-old with a $600,000 mortgage, putting $30 a week into super yields $7,330 more than paying down the home loan.
A worked example shows the maths for people torn between two strategies. Gavin, 55, has $30 a week to save and wonders whether to pay extra on his $600,000 mortgage at 6.75 per cent or salary sacrifice into super.
Extra mortgage payments over 10 years save $5,255 in interest and cut the principal by $15,600. The total benefit is $20,855.
Salary sacrifice of $42.86 a week costs $36.43 after a 15 per cent contributions tax. It delivers $28,185 in extra super at 7.5 per cent growth over 10 years.
That yields a net gain of $7,330 more than extra mortgage payments. But the choice depends on other factors: whether he needs accessible cash for emergencies, when he plans to retire, and his comfort with carrying debt.
Many Australians in their 50s are at peak mortgage and must decide where their spare cash does the most good.
- $600,000 at 6.75%
- Mortgage amount
- $7,330 more over 10 years
- Super option advantage
- 7.5 per cent
- Super growth rate assumed
- 15 per cent
- Contributions tax rate
Why it mattersPeople in their 50s face a genuine decision point that shapes their retirement by tens of thousands of dollars.
AustraliaMore than half of Australians aged 55-64 still carry a home loan, making this choice a reality for hundreds of thousands of people planning for later life.
✓ Claims checked against the source and corrected before publish. checked 2 h ago
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