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Taking out a home loan triggers super engagement

A new industry report has found that Australians who sign up for a new residential mortgage increase engagement with their superannuation.

Australians who take out residential mortgages are more likely to engage with their superannuation funds as they rethink their contribution strategies, according to new research.

The report by the ARC Centre of Excellence in Population Ageing and Research (CEPAR) said super fund members who took out a new residential mortgage in 2014 changed their super contribution behaviour before and/or after mortgage commencement, compared with those who did not take out a mortgage.

The report further stated that the timing and size of these changes varied by mortgage type (owner-occupied or investment), employment status (employee or self-employed) and key demographics (gender, age, income).

The research project was conducted by researchers based at the University of New South Wales, the University of Sydney, University of Technology Sydney and Colonial First State (CFS).


The researchers used a unique dataset of super fund members where they had information about their decision to take out a residential mortgage (from the Commonwealth Bank of Australia [CBA]), their super accounts (from CFS), and their engagement with the two providers.

They used a total sample of 1,011 CFS super fund members who took out a mortgage with CBA in 2014 and a matched sample of 1,011 super fund members who did not take out a mortgage over this period.

For new owner-occupied mortgages in 2014, the researchers found an increase in the proportion of members making superannuation guarantee contributions at 13 months before mortgage start, which was maintained for the 36 months following mortgage commencement, compared to super fund members who did not take out a mortgage.

However, for new investment mortgages, the researchers found no change in the proportion of members making super guarantee contributions in the 36 months before or after mortgage start.

Commenting on this difference, professor in the University of Sydney Business School Susan Thorp said: “Those taking out a mortgage to buy an investment property tended to re-weight their portfolios towards real estate and away from their super, but owner-occupiers tended to build up their super after the real estate purchase”.


Interestingly for policymakers and super funds, the report also showed that super fund members who took mortgages also increased their interactions with their financial services providers.

“Members who took out a mortgage increased their number of bank branch, visits, use of their bank app and online banking, as well as phone calls to their super fund,” Professor Thorp said.

With the super industry grappling with low levels of member engagement due to its inherent nature of being a system that allows members to set and forget their super until retirement, CFS national manager analytics and business intelligence James Brownlow said the results provide important insights into what triggers member engagement with their super.

“This research will help policymakers as well as super funds like CFS more effectively engage members by shedding light on what triggers their engagement with super,” he said.

Taking out a home loan triggers super engagement
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Malavika Santhebennur

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.

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