Every spare pre-tax dollar faces a fork in the road. Take it as salary and it is taxed at your marginal rate plus the 2% Medicare levy before it touches the mortgage. Salary sacrifice it and it enters super losing only the flat 15% contributions tax. At a 32% marginal rate, $1,000 becomes $680 on the loan or $850 in super. At 47%, it is $530 versus $850 — super starts 60% ahead.
That head start is only half the story. The mortgage dollars earn a guaranteed, tax-free return equal to your loan rate — say 6% — while super dollars ride market returns, historically around 7% p.a. for a balanced option but never guaranteed. When your marginal rate is high and expected super returns match or beat your mortgage rate, salary sacrifice usually wins on the numbers. Near the 18% bracket floor (16% + Medicare levy), the tax gap almost disappears and the guaranteed mortgage return often makes extra repayments the sounder choice.
The catch is access. Money in super is preserved until at least age 60; money paid into a loan can usually be redrawn. The closer you are to preservation age, the shorter the lock-up and the stronger the case for super.
How this calculator works
Both paths are simulated month by month over your chosen horizon. In the mortgage path, the spare amount is taxed at your marginal rate (including Medicare levy) and added to the minimum repayment; once the loan is repaid, the spare pre-tax amount is redirected into super. In the super path, it is salary sacrificed from month one while the loan runs on minimum repayments. Each path's net position is the loan principal repaid plus the extra super accumulated, and the headline figure is the difference at the horizon.
The model is deliberately conservative for the mortgage path in one respect: after early payoff, the freed-up minimum repayment is not reinvested. It also treats your super return input as net of fees and earnings tax, and does not model rate changes, carry-forward cap amounts, or Division 293 tax for incomes above $250,000.