Self-Managed Super Fund (SMSF) Home Loan

A key reason people elect to manage their own superannuation is the flexibility to choose where their money is invested

Self-Managed Super Fund (SMSF) Home Loan

A key reason people elect to manage their own superannuation is the flexibility to choose where their money is invested. Changes to superannuation legislation now allow self-managed superannuation funds (SMSFs) to borrow, and to invest, providing certain conditions are met.

This means that if you have a self managed super fund (SMSF), you may now borrow money to purchase a Residential or Commercial Property through your fund. For further information, contact Best Home Loans, your self managed super fund lending specialist team.

Acceptable Items for Borrowing

  • Rental Income
    – 80% of proposed rental income from the property to be purchased
  • Other SMSF Income
    – for a residential loan, 80% of all income assessed from the previous 2 years’ tax returns or financial reports and;
    – for a commercial loan, 70% of all income assessed from the previous 2 years’ tax returns or financial reports
  • Member Contributions
    – for a residential loan, 80% of member contributions assessed on either:
    – the previous 2 years’ tax returns or financial reports (existing Fund)
    – superannuation contributions shown on previous 2 years’ tax returns of the beneficiaries (new Fund)
    – ability to make additional contributions to a new or existing fund
    – for a commercial loan, 70% of member contributions assessed on either:
    – the previous 2 years’ tax returns or financial reports (existing Fund)
    – superannuation contributions shown on previous 2 years’ tax returns of the beneficiaries (new Fund)
    – ability to make additional contributions to a new or existing fund

Super Fund Loan Exclusions

  • owner-occupied purpose
  • construction loans
  • non-prime lending areas
  • some security types – second mortgage, vacant land, company or stratum title, properties exceeding 2.5 hectares
  • non-residents, refinances, redraws, increases

At a Glance

  • the purpose of the loan is to only purchase a residential investment or commercial property
  • no additional security properties can be supplied to reduce the loan to valuation ratio (LVR)
  • for a residential loan, the maximum LVR is 80%, depending upon the lender, based on a standard residential property in a metropolitan area
  • for a commercial loan, the maximum LVR is 70%, depending upon the lender
  • the purchase of the property must be from an unrelated party
  • loans are available from $10 000 – $500 000, depending upon the lender
  • loan term is between 4 – 30 years for a residential loan and 4 -15 years for a commercial loan
  • interest offset is available, depending upon the lender
  • non-recourse loan
  • both variable and fixed rates are available