Where Should $10,000 Go: Your Mortgage, Super or HECS?

Each option solves a different problem. An extra owner-occupier mortgage repayment reduces non-deductible interest and brings the payoff date forward. A concessional super contribution can put more capital to work because it is generally taxed at 15% on entry instead of being paid as taxable salary, but its return is not guaranteed and the money is preserved. A voluntary HELP repayment reduces a debt that is indexed rather than charged commercial interest, but the payment is non-refundable and income-contingent repayment protections already limit what must be paid each year.

That means a single “best return” number would be false precision. The mortgage calculation reports principal paid, interest avoided and months saved. The super calculation reports the amount invested after contributions tax and a projected future balance. The HELP calculation reports indexation avoided and the change in payoff time. Those outputs happen on different dates and carry different risks.

A useful comparison begins by making the household cost equal, then asks whether the constraints around each outcome fit the real goal. The calculator below does the first part. The rest of this guide explains the checks that arithmetic cannot settle.

Start with the amount of future gross salary you could sacrifice. The tool calculates how much annual take-home that choice would actually cost after 2026–27 income tax, Medicare, HELP and Medicare Levy Surcharge rules. It then uses precisely that cash amount for the mortgage and voluntary HELP legs.

A $10,000 mortgage or HELP payment comes from money on which income tax has already been paid. A $10,000 salary sacrifice is redirected before income tax, then the super fund generally deducts 15% contributions tax. Comparing $10,000 in each destination quietly makes the cash options more expensive to the household.

At a $100,000 cash salary with full-year hospital cover, the automatic $1,000 work-related deduction and no existing sacrifice, the engine calculates the one-off choice this way:

Salary sacrifice usually does not reduce HELP repayment income or the MLS income test. Reportable super contributions are added back for those tests. It can reduce the dollar amount of MLS because the selected surcharge rate is applied to a lower taxable base, but it does not move the person below the tier. This is why the calculator uses a full before-and-after tax calculation rather than assuming that everyone saves exactly their headline marginal bracket.

The immediate advantage is the entry-tax difference. For many employees, a concessional contribution is taxed at 15% inside the fund while the equivalent salary slice would face income tax and usually the 2% Medicare levy. At the $100,000 example salary, that turns $6,800 of forgone take-home into $8,500 invested inside super.

An effective salary-sacrifice arrangement must be agreed with the employer before the relevant work is performed or the entitlement accrues. It cannot retrospectively turn salary already earned into sacrificed pay. If the money has already been received, the separate personal-deductible-contribution route described above may be available instead.

Time then matters. At the calculator's default steady 6.1% annual return net of investment fees and earnings tax, $8,500 grows to about $27,780 over 20 years. That is a projection in future dollars, not a promise. Balanced super options can have negative years, the actual fee and tax drag varies, and a different investment mix changes both expected return and risk. The tool also shows the result after 2.5% inflation so a future-dollar number is not mistaken for today's spending power.

The cap can stop the comparison before it starts

The general concessional contributions cap is $32,500 for 2026–27. It includes employer Super Guarantee contributions, salary sacrifice and personal contributions claimed as a deduction across all funds. At a $200,000 salary, 12% employer SG is about $24,000, leaving only $8,500 of ordinary cap room before any existing sacrifice. A proposed $10,000 contribution therefore exceeds that ordinary room by $1,500.

Eligible people whose total super balance was under $500,000 at the previous 30 June may have unused cap amounts from the prior five financial years. The ATO applies those amounts oldest first. Because contribution timing and fund reporting matter, the calculator asks for the available figure shown in ATO online services rather than trying to infer it.

Higher-income earners need a second tax check

Division 293 can add 15% tax where Division 293 income plus relevant concessional contributions exceeds $250,000. The extra tax is limited to the contributions or the amount above the threshold, whichever is lower. The calculator attributes only the incremental Division 293 assessment and assumes it is released from super for the equal-cash comparison; paying it personally would increase the household cash cost.

An extra repayment reduces the balance on which the lender calculates interest. On an owner-occupied home, that avoided interest is generally paid from after-tax money and is not deductible. If the loan rate stays at 6.5%, each dollar removed from the balance avoids interest at that rate while the dollar would otherwise remain outstanding.

In the worked example, putting the equal $6,800 cash cost against a $500,000 principal-and-interest loan with 25 years remaining saves about $26,757 over the remaining schedule and clears the loan nine months earlier. The model holds the 6.5% rate and scheduled repayment constant. Real variable rates move; refinancing, fees, missed repayments and later redraws all change the result.

The interest saving is less exposed to market risk than super returns, but it is not a fixed 25-year return forecast: the relevant rate is whatever the lender actually charges over time. Paying earlier also matters because it removes principal for more interest calculation periods. The same lump sum close to the end of a loan has fewer years in which to save interest.

Offset and redraw are not interchangeable

A 100% offset can produce the same daily interest reduction while the cash remains in a separate transaction account. That access can make an offset a useful place for an emergency buffer, but the loan may carry a higher rate or package fee. Redraw is money already paid into the loan; access, limits, fees and processing depend on the lender's terms. A fixed loan may also limit fee-free extra repayments.

The calculator models an owner-occupier loan. Interest on an income-producing investment property can have different tax treatment, so its after-tax cost is not simply the headline mortgage rate and this comparison should not be reused for that case.

HELP does not charge commercial interest. Outstanding debt more than 11 months old is indexed on 1 June to preserve its real value, using the lower of the relevant CPI and Wage Price Index factors. The rate applied on 1 June 2026 was 2.8%; the next rate is unknown, so the calculator treats it as an editable assumption rather than a forecast.

A voluntary payment is applied to the loan balance and is additional to the compulsory repayment calculated through the tax return. At $100,000 in the worked model, paying $6,800 against a $30,000 balance avoids about $190 at the next 2.8% indexation and roughly $1,185 across the modelled life of the debt. With 3.7% annual salary growth it clears in a year earlier than the no-lump-sum projection.

The low apparent return is only part of the distinction. HELP repayments are income-contingent: below the repayment threshold there is no compulsory amount, and from 2025–26 the main schedule is marginal. A voluntary payment is non-refundable, so it exchanges accessible cash for a smaller debt that would otherwise be repaid only as income permits.

Paying HELP off completely can also change monthly cash flow and may affect how a particular lender assesses a home-loan application. A partial payment usually leaves the income-based compulsory repayment in place. Lender policies are not uniform and this calculator does not estimate borrowing power, so obtain the lender's or broker's before-and-after figures before using cash for that purpose.

Consider a single Australian resident earning $100,000, with full-year hospital cover, a $500,000 owner-occupier mortgage at 6.5% with 25 years left, a $30,000 HELP balance and 20 years until retirement. They have no existing salary sacrifice or carry-forward amount. The comparison begins with $10,000 of gross future salary.

The table is deliberately not sorted. Super shows a balance on one future date, mortgage shows cash flows avoided across a 25-year schedule, and HELP shows indexation avoided on a debt with income-contingent repayment rules. Choosing the largest displayed dollar figure would ignore when the benefit arrives, whether it is accessible, and how uncertain it is.

Salary changes the take-home cost of a $10,000 concessional contribution. In a higher tax bracket, less household cash is forgone to put the same gross amount into super. LITO creates a slightly different result around lower incomes. At higher salaries, employer SG uses more of the concessional cap and can make the proposed amount invalid without carry-forward room.

*At $200,000, employer SG at 12% is about $24,000, leaving $8,500 of the ordinary $32,500 cap before any other concessional contributions. The table therefore refuses to project the full $10,000 super leg. An eligible carry-forward amount can change that result.

HELP indexation savings fall as salary rises in this particular grid because larger compulsory repayments clear the $30,000 starting balance sooner, leaving fewer years for a voluntary payment to avoid indexation. A different debt balance, future income path or indexation rate changes the pattern.

Before comparing projected dollars, establish what the money needs to do. These questions often matter more than a small difference between modelled returns:

• Is there an emergency buffer? Money in super or paid voluntarily to HELP is generally not available for an unexpected bill. An offset can preserve access, subject to account terms.
• Is there more expensive debt? Credit-card or personal-loan interest can exceed the rates modelled here and deserves a separate comparison.
• Will the super contribution fit? Check contributions received by every fund, employer SG, existing sacrifice, deductible personal contributions and the actual carry-forward figure before 30 June.
• How soon might the cash be needed? Super is generally preserved until a condition of release. Mortgage redraw is governed by the loan contract. A voluntary HELP repayment is non-refundable.
• Would the HELP payment clear the whole debt? A partial payment usually leaves the compulsory repayment and its effect on cash flow in place. A full payoff can be materially different.
• Are the assumptions genuinely comparable? Stress-test a lower super return, a different mortgage rate and a different HELP indexation rate. Do not use the 2026 figures as 20-year forecasts.
• Are there rules outside this model? Defined-benefit funds, investment loans, family payments, child support, unusual income-test adjustments, tax residency, and approaching Age Pension eligibility can all change the analysis.

The practical output is not “option A always wins.” It is a clean set of trade-offs: how much cash the choice costs now, what it changes, when the benefit arrives, what could make the projection wrong, and whether the money remains available if life changes.