[Mulva]

It would be great if you could use a limited portion (like 10%) of your super as security for a mortgage (security rather than deposit)...but just can't see how to make that workable.

That bit of super used as security would stay invested in your super (and hopefully earning). If all goes well you pay off the full mortgage over time and the security over that bit of super is then removed (so that bit of super is then properly 'yours' when you retire). But if you default on the mortgage and there is a forced sale that does not cover the outstanding, then the bank gets that bit of your super that was security for the loan (up to the amount of the shortfall).

You limit it so that worst someone can do is 10% of their super (or limit it to less - limited so you can't do your nuts). And it is a one-off - you never get a second chance to blow a further 10%.

There would be those that do end up losing their place (losing their 10% super); but I'd reckon there would be so many more that would get into the market with that extra security and make good of it to never have it called in.

But like I said, probably lots of issues that make this unworkable, or the possibility of people losing a set amount of super is unpalatable. I've heard that if you have a mortgage and run into difficulty you can get some of your super then, but I think you lose something like 30% in fees/penalties and 30% in tax, so you only get roughly $1 out of every $3 they let you get from your super - whereas if you put up some of your super as security and lose it then you really got $1 for $1. Maybe that is the biggest issue - Govco would not get their $1 for every $3 of yours?

Rambling