Mark Bouris tells Treasurer Joe Hockey to help struggling Australian mortgage holders
EXCLUSIVE: MARK Bouris is urging Treasurer Joe Hockey to consider measures to help struggling mortgage holders pay off their loans faster.
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MORTGAGE holders need help paying off their loans faster to avoid blowing their entire super savings on securing their family home, according to celebrity business mentor Mark Bouris.
Mr Bouris is urging the Treasurer to use his financial system inquiry to consider measures to help struggling mortgage holders pay off their loans faster.
A submission to the inquiry by Yellow Brick Road - of which Bouris is executive chairman - says borrowers should get access to the same tax breaks that apply to super contributions for making additional repayments on the principal of their family home.
"It is important that all Australians can achieve their dreams to own a home and retire comfortably," Mr Bouris writes in the introduction to the submission.
Currently, many retirees end up blowing their entire superannuation lump sum payment to pay off their mortgages anyway, leaving them with little in savings and having paid thousands in extra interest payments to lenders over the life of their loan.
Yellow Brick Road wants Hockey to consider a new retirement savings asset class which does not discriminate between extra payments for a home loan and extra contributions to super.
"The Australian Government should reform superannuation legislation to enable Australians to deposit additional savings into a retirement account that is able to sit as an asset account linked to their mortgage for their principal place of residence."
"Our suggested alternative model would enable Australians to reduce their debt earlier, reduce their housing stress, and build up and asset that has been recognised as being the single most important factor to having a comfortable retirement."
Borrowers could boost their retirement savings by thousands of dollars by paying less interest on their loans and avoiding lenders mortgage insurance in the early years.
Currently, young families face little incentive to contribute extra to super when they are attempting to pay down massive mortgages, the submission says.
"The grand irony of those who argue that superannuation ought not be used to support homeownership is that retiring Australians are increasingly using substantial portions of their tax preferred retirement savings to do exactly that - pay off their mortgage - but only after the lenders have profited substantially from the delayed repayment and compounding interest."
Australia's super and housing systems must be considered as part of the same national saving system.
"Regrettably, those silos [to date] in savings policies means that Australian families might not be saving enough for retirement, and they are losing potential disposable income through the compounding effect of longer, later and larger mortgages," it says.
To limit the impact on the budget bottom line, a cap could be applied the value of extra mortgage payments that would qualify for the 15 per cent tax concession.
Yellow Brick Road is encouraging Australians to have their say here.
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