SMSF Loans

Arranging SMSF Loans in Townsville and North QLD

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Self-Managed Super Fund Loans 

The purpose of a Self-Managed Super Fund (SMSF) Loan is to purchase a residential or commercial investment property. A Limited Recourse Borrowing Arrangement (LRBA) involves an SMSF trustee taking out a loan from a third-party lender. The trustee then uses those funds to purchase a single acquirable asset. Refinance of SMSF loans are possible, provided that the original property remains in place as security. T&Cs apply.

 

  • Residential Loan Ratios up to 80% where the SMSF trustee is a company
  • Commercial Loan Ratios up to 75% where the SMSF trustee is an individual or a company
  • Loans are available up to $2m with sufficient cash flows to service the loan. This can come from rental incomes, investment earnings and member contributions
  • Both fixed and variable rates are available
  • Loan Terms up to 30 years

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Advantages of Buying an Investment Property with SMSF Borrowing

  • Commercial property owned by you can be sold to the SMSF at market rates
  • Assets in the SMSF are secure as the lender only has a recourse on the investment property
  • The loan is paid off by using super contributions and rental income

Things to Consider

  • The SMSF needs to be established before the Bare Trust and Custodian Corporate Trustee are established
  • The Bare Trust and Custodian Corporate Trustee are mere title holders of the property and all transactions will occur within the SMSF
  • The investment strategy of the SMSF should allow for property investment
  • The SMSF will require sufficient cash flows to service the loan. This can come from rental incomes, investment earnings and member contributions
  • All transactions incurred must be at arm’s length and at market rates

SMSF Loan Exclusions

  • Owner occupied purpose
  • Construction loans
  • Some post code restrictions apply
  • Can’t redraw or increase an existing SMSF loan
  • Can’t use equity in an SMSF property to purchase another property, however there are ways around this. Enquire with the team

Frequently Asked Questions

  • What costs are involved with SMSF loans?

    The main cost associated with SMSF loans is the interest rate. However, other costs include application fees, service fees, lender legal fees and early repayment fees. Comparing these costs when shopping around for an SMSF loan is important.

  • What is a bare trust?

    A bare trust is a type of trust that is used to hold a property for the benefit of another person. The trustee has no control over the property and the beneficiary has full control. This type of trust is often used in SMSF loans, where the trustee (the SMSF) holds the property for the benefit of the members (the beneficiaries).

  • What type of property can my SMSF be used to purchase?

    Your SMSF can purchase a wide range of property types, including residential, commercial and industrial real estate. However, there are a few restrictions on what type of property your SMSF can purchase, such as: 


    • The property must be purchased for the sole purpose of providing benefits to fund members 
    • The property cannot be used as a holiday home or for any other personal use by fund members 
    • The property cannot be purchased from a related party of the fund (such as a family member)

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