Don't raid super to pay off mortgage

Want to pay off the mortgage? Super not the only option

Money
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A new study suggests more people may raid their superannuation to eliminate mortgage debt.

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ANYONE thinking of using their superannuation to pay their mortgage should think again, according to an equity release provider.

Homesafe Solutions chief operating officer Dianne Shepherd aired her concerns following the release of a study suggesting more Australians may be tempted to use their superannuation to eliminate mortgage debt.

Ms Shepherd says using equity in the family home is a much better answer.

"Releasing some of the equity from the family home may be a powerful alternative strategy which allows retirees to reduce or eliminate their mortgage and keep their super intact," she said.

"Using superannuation to pay off the mortgage may diminish lifestyle in retirement, as people may then be relying solely on the age pension."

Findings from a study by RMIT and the Australian Bureau of Statistics reveal the number of Australians aged 55-64 still paying down their mortgage has jumped from 14 per cent to 47 per cent in 26 years.

An ABC TV 7.30 Report investigation found that half of all 50-year-olds expect to retire at 67 still carrying mortgage debt.

"The family home, as a store of wealth, has potential to become the fourth pillar of the retirement income system," Ms Shepherd said.

"This would allow more Australians to age in place without being hampered by excessive debts such as outstanding mortgages."

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