SMSF Loans
Finding the right loan that is flexible to support you through to completion
An SMSF loan enables the fund to purchase eligible, income-producing property. They vary from regular loans in a number of ways and are generally more restrictive — they usually require higher deposits, will lend you a lower percentage of the property’s value and prohibit redraw. Recent changes to super laws do permit investors to refinance loans to keep borrowing arrangements competitive.
There are many SMSF loan products readily available in the market, each with varying points of differentiation relating to cost, credit policy and structural requirements.
SMSF loans generally allow up to 70% leverage and 30-year terms, with up to five years of interest-only repayments. The minimum loan amount is $100,000 with no set maximum, subject to lender approval of the property and borrowing capacity of the fund.
Some lenders will apply standard variable or fixed interest rates comparable with rates available for consumer residential mortgages, while others apply commercial/business loan rates.
Some lenders will assess your SMSF’s ability to meet repayments and service the loans based on member contributions and rental income, while other lenders will also look at personal income streams and offsets with personal liabilities. Others will ask for a personal guarantee from members of your SMSF, which could put your personal assets at risk.
Our lending specialists can help you find the find the right financing product.
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