03 Sep 2022

Can My Employer Make My Mortgage Repayments?

Calculating Fortnightly Repayments

Yes, you can salary sacrifice your mortgage, which results in repaying a home loan faster and a reduced taxable income. Salary sacrificing works due to your employer paying a percentage towards repaying home loans, pension, and other expenses from your pre-taxed monthly income. As a result, you will receive fewer payments from your employer monthly and pay fewer taxes yearly. 

Salary sacrificing is also referred to as total remuneration packaging or salary packaging. It can be obtained by employees whose employers offer this service. Salary sacrificing removes the need for borrowers to monitor monthly loan repayments as the percentage taken is sent directly to individual lenders. 

When applying for a home loan, lenders may view salary sacrificing as expenditures, which can lead to reduced loan amounts. We recommend verifying with your employer if salary sacrificing is an option you are capable of exploring, as varying companies and businesses will have their own rules. 

Salary sacrificing can also be used to pay for childcare expenses, car loans, and health insurance. For mortgage repayments, salary sacrificing is only eligible for non-investment properties. Some banks and lenders do not recognize salary-sacrificing repayments, so it is best to check with your financial institution for their policies.

Conclusion

If you are interested in learning more about salary sacrificing for mortgage payments, our professionals at Mortgage House are prepared to assist you through every step of your journey. For more helpful information on mortgage repayments, we recommend looking at our free mortgage repayment calculator for personalized assistance.

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