How Much Can I Borrow with My Super?
Borrowing from your super to purchase assets, such as an investment property or shares, is a common way most Australians choose to increase their retirement savings. However, the amount you can borrow depends on how much you have in your super. The lender you apply with will calculate your fund’s borrowing power, which determines your maximum loan size.
How Do Lenders Assess My Fund’s Borrowing Power
When assessing your fund’s borrowing power, your lender will look at:
- Your employer’s contributions to your super
- Your voluntary contributions to your super
- Any potential rental income on the investment property you will to purchase
- If you are borrowing through a self-managed super fund, they will also look at any potential dividend and interest income
Your borrowing power is affected by how much of the income your lender accepts. Some lenders only accept 80% of the income in your super. Others may accept all of it.
How Much Can I Borrow if I’m Accessing My Super Early?
If you are accessing your super early due to any financial hardships, you can borrow between $1,000 and $10,000 from your super every 12 months. However, if you have reached your preservation age, plus 39 weeks, (which is determined by the year you were born), there is no limit to how much you can borrow from your super.
If you are interested in using money in your super to purchase assets, the experts at Mortgage House can help. We will discuss with you your borrowing options, as well as helping you weigh the pros and cons of using your super to receive a loan.