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Using Super To Buy A House

Using super to buy a house was being considered by the Federal Government but it did not pass the vote in the Senate so it is not currently available as a no deposit solution.

If you’re interested, then like us on Facebook and we can inform you if the government makes a decision on this policy.

Can I use super for a house deposit?

The answer is no. The Australian Government considered this legislation in the spring session of Parliament in 2014 with no decision made.

However, if you have a significant amount of money in super, say $200,000 or more, then you can buy an investment property in your SMSF.

Do I need any savings of my own?

When a bank considers your deposit to buy a home as part of your loan application they look at your funds to complete and your genuine savings.

Having enough funds to complete means your deposit, super withdrawal and First Home Owners Grant (if applicable) is enough to cover the purchase price, stamp duty, mortgage fees and legal costs.

Ultimately, you need more than 5% of your deposit in genuine savings to buy a home.

Unfortunately, funds from your super fund will not count as genuine savings since a portion of your salary is normally applied to superannuation each pay.

It’s not a good indiciation that you’re financially responsible.

The good news is that some lenders will make an exception to their genuine savings policy if you’re renting.

Others have no genuine savings requirement at all!

How much can I release from super?

The Australian Government has not confirmed the amount that you would be allowed to withdraw.

However, we would expect them to allow you to release no more than $25,000 as this will have less of an impact on your savings for retirement.

When do I have to repay my super fund?

The Australian Government has not confirmed when funds must be repaid but we’re expecting them to allow you up to 15 years to repay your super fund, with no interest charged.

Do the repayments to super affect my borrowing power?

Yes, lenders would consider the repayments in the same way as a personal loan.

Your borrowing power for your home loan will be reduced slightly to allow for the repayments into super.

This is to comply with the National Consumer Credit Act 2001, which requires that a bank must show that you can repay a mortgage without undue hardship.

Is this a SMSF loan?

No, this is using super to buy a house to live in.

A self-managed super fund loan is where you buy an investment property in your super fund.

Are there any additional costs?

At present, we don’t know the costs of using a superannuation home loan deposit because the government hasn’t made a decision to allow this.

However, it may be that your super fund charges an administration fee of some kind.

There are other ways your super might help

Apart from using your own superannuation to buy your first home, Australia’s multi-trillion dollar super pot may help in other ways.

The Australian Housing and Urban Research Institute (AHURI) has pushed for a government department that would borrow money from Australian super funds and institutional investors and lend this money to fund affordable housing projects.

AHURI said this federal department would essentially be a “bond aggregator”.

This could help tackle the issue of undersupply in the Australian real estate market and hopefully cool down house prices.

First-time buyers trying to crack the market while renting could instead move into cheaper government-subsidised apartments, making it easier to save a deposit faster.

Apply for a home loan

We can’t yet offer you this product as it has not been approved by Parliament.

Please like us on facebook and our mortgage brokers will inform you when this option is available.

Still have questions? Feel free to comment below and we’ll get back to you as soon as possible.

  • Sujan

    Where can I find more information about this legislation? Is there a government website or similar?

  • Hi Sujan, you can find more info about this on the Parliament of Australia’s official site.

  • Murray

    Can I get a home loan based on my super funds since I don’t have much savings of my own.

  • Hi Murray,

    Super funds can only be used to buy investment properties not the owner occupied property. You could discuss with a mortgage broker regarding your situation further.

  • Soward

    My parents already have a home loan of their own so I’m not sure if they can help :(

  • Hey Soward,

    That’s okay. As long as they have sufficient equity, some of our lenders can still secure a guarantee on their property using a second mortgage. You can use our guarantor loan calculator to work out if your guarantor has enough equity in their property:

  • Baker

    So we can’t buy property using our SMSF?

  • You can’t use your SMSF as a home loan deposit to buy a property to live in but you can use your SMSF to buy an investment property. Please check out the SMSF loans page for more info:

  • jason

    I would like to know how much then can I borrow using my SMSF to buy an investment property. Do you have a calculator for this?

  • Hey Jason,

    Yes, you can find out how much you can borrow in your SMSF using the SMSF borrowing power calculator. Instructions and additional info are on the page itself: