Is salary sacrificing my home loan repayments worth it?

A salary sacrifice arrangement is worth considering particularly if you earn a high income because you can enjoy significant tax benefits by reducing your taxable income. If your employer offers salary sacrificing as an option, you should do the calculations to see whether you would benefit from salary sacrificing. If you're in any doubt about whether this option could work for you, ask your accountant for advice.

What happens if my mortgage repayments increase while I salary sacrifice?

If your interest rate increases (and therefore your mortgage repayments) you will end up sacrificing more of your salary. Considering you'd be paying the higher repayments regardless of if you were salary sacrificing or paying from your post-tax income that would happen either way. One problem with your mortgage repayments increasing though is that you could end up going over the FBT threshold. In this case, your employer will need to pay FBT on the amount above that threshold.

Can I refinance or top up my home loan while I salary sacrifice?

If you want to amend your home loan, whether by topping up the loan amount, refinancing your loan or readjusting the loan term, you will need to talk to your employer first. In some of these situations your repayments may increase and that could mean your employer ends up paying FBT. Even if your repayments are going to decrease, perhaps by extending the loan term, it's important to check that your employer is happy to continue the agreement for a longer term. If you're thinking of refinancing, you will need to check with your new lender that they accept salary sacrifice repayments as not all do.

Is there a limit to how much I can salary sacrifice?

Although there's no limit to how much you can salary sacrifice, you could put yourself at risk of financial hardship by sacrificing too much unnecessarily. You would also increase the amount your employer would need to pay in FBT.