You’ve finally paid off your home loan. Now what?

Owning your own home outright is a great achievement. But once the home loan is gone, think about your next steps to having a happy and secure financial future. 

You’re down to zero on your home loan? Congratulations! You’ve finally done what many people dream of.

But while the goal of paying off your home loan is a common one, it’s important to work out a smart plan for how to use the money that used to go to your lender.

Your first instinct might be to reward yourself and, after years of sacrifice and hard work, why not? But once you’ve taken your dream trip or splashed out on a new toy it’s wise to take more of a long-term view. 

Consider boosting your super to retire your way

This window provides an opportunity to take a look at the type of retirement you’re hoping to live. While you might be surprised at how much a comfortable retirement actually costs, our retirement simulator could help you determine more accurately how much you might need.

Perhaps your super balance doesn’t quite match what you think is needed to fund your retirement dreams? If so, the lead up to retirement is a good time to give your super that extra boost.

By channelling the money that once paid off your home loan into your super, either by salary sacrificing from your pre-tax salary or paying with after-tax funds, you can give your super a decent lift.

Invest to build future wealth

If your super’s in good shape, you might like to use the surplus funds to build your wealth via other investments.

If you prefer investments with a lower risk profile, savings accounts or term deposits could be the way to go.

But if you can invest for a five to ten-year timeframe, you might consider shares or managed funds. These can provide income in the form of dividend payments, plus the potential for capital growth.

Another option is buying an investment property. While the thought of taking on a new housing loan may be the furthest thing from your mind, the potential to cover repayments with the rental income could make it worth considering.

Work less, enjoy life more

Now that such a major financial commitment is no longer hanging over your head, you could consider taking a step back from work. Known as transition to retirement (TTR), this can provide financial flexibility, allowing you to work less without reducing your take-home pay, by topping it up with a portion of your super taken as a pension.

A minimum age applies for you to benefit from TTR strategies and they can be quite complex.

Explore your goals

You may be in a position to pursue other goals that go beyond building your wealth. Perhaps you want to give your kids a leg up financially or assist ageing parents to live a happier and secure retirement.

Whatever your future plans, see your financial adviser to assess your situation and help you understand the impact of each option to find the path that is right for you. 

Or if you don’t have an adviser, we can put you in touch with one. Check out our find an adviser tool or call us on 131 267.

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Explore your goals

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Salary sacrifice calculator

Compare the effect on take home pay and super by making personal super contributions, using either salary sacrifice or an after-tax contribution. 

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It’s important to consider your particular circumstances and read the relevant Product Disclosure Statement before deciding what’s right for you. This information hasn’t taken your circumstances into account.

This information is provided by AMP Life Limited. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice.

Although the information in this article is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decisions. Except where liability under any statute cannot be excluded, AMP does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.