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Superannuation As A Deposit

Allowing first home buyers to use their superannuation as a deposit is currently being considered by the Federal Government but nothing is yet to be passed through the Senate and it is not currently available.

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

Is this option available now?

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

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.

You have acceptable funds to complete if you have sufficient funds to complete the purchase. In other words, is your deposit, super withdrawal and First Home Owners Grant (if applicable) enough to cover the purchase price, stamp duty and other expenses?

You have acceptable genuine savings if you have saved more than 5% of the deposit yourself. Unfortunately funds from your super fund will not count as genuine savings as everyone has a portion of their salary go into super so it doesn’t show that you are financially responsible.

The good news is that some lenders will make an exception to their genuine savings policy if you are renting. Others have no genuine savings requirement at all!

How much can I release from super?

The Australian Government has not yet confirmed the amount that you can withdraw from super.

We are expecting them to allow 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 yet confirmed the amount when the funds must be repaid but we are 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, which requires that a bank must show that you can repay a mortgage without undue hardship.

Is this a SMSF loan?

No, this is releasing funds from your super fund to use as a deposit to buy a home 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, there are no known additional costs for this option however, your super fund may charge an administration fee of some kind.

Apply for a home loan

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

Please then 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:
    https://www.homeloanexperts.com.au/mortgage-calculators/guarantor-loan-calculator/