The major banks ceased offering SMSF loans to new borrowers during the Banking Royal Commission. Unfortunately, most of these banks have also ceased offering competitive interest rates to existing SMSF borrowers.
Due to some of the high loan entry costs, such as bank legal fees, existing SMSF borrowers have felt trapped and unable to refinance. As at 20 September 2022, current interest rates with two of these banks for Self-Managed Superannuation Fund residential investment loans are 8.12% Principal and Interest and 8.17% per annum respectively.
Fortunately, we now have a lender offering a highly competitive loan product for SMSF residential refinances under 70% LVR.
What is the Special Offer?
Variable Interest Rate of 5.29%, Principal and Interest only (correct as at 20 September 2022).
Maximum loan valuation ratio (LVR) 70%
Establishment fees – Nil
Bank legal costs and trust perusal fees – Nil
Government fees such as mortgage discharge and registration – State Government standard fees applicable.
Valuation and processing fee – normally a maximum of $350 for a single house or unit up to $1M in a metropolitan location only. This will be confirmed upon enquiry once we have the property type and location.
Your current bank discharge fee – this varies but as a guide St George charge $350 for an SMSF discharge if your current interest rate is variable.
Your current bank penalties – banks do not charge penalties if on a variable interest rate. If you are on a fixed interest rate, you will need to check with your current lender what the fixed rate break cost penalty may be before you make a decision on whether this is right for you. Some non-bank lenders may pass on a penalty even when your SMSF loan is on a variable interest rate. If in doubt, it is imperative that you call your current lender to confirm if any penalties may apply.
Personal legal costs – SMSF loans require guarantees from the SMSF members and therefore you will be required to engage a lawyer to provide you with guarantee advice. This is requested after approval of your SMSF loan.
For more detailed insight into what you may save, contact us now at Aspire Mortgage and Finance.
Note
Trustee of the SMSF must be a corporate entity to qualify.
All information here is correct as at 20 September 2022 and subject to change without notice.
Disclaimer
The team at Aspire Mortgage and Finance are mortgage and finance brokers who have been accredited to advise on SMSF mortgages since 2012. Our advice is limited to the associated mortgage products and not general advice on your superannuation strategies. You should always consult your financial planner or accountant regarding any investment advice for your SMSF and retirement planning.
