Property loan
Self managed superannuation fund (SMSF)
A Self-Managed Super Fund (SMSF) loan, also known as a Limited Recourse Borrowing Arrangement (LRBA), enables you to utilise the resources within your SMSF to acquire an investment property, whether residential or commercial.
There are over 610,000 SMSFs holding $876 billion in assets as at 30 June 2023.
How does a loan for a SMSF work?
Only a select group of lenders offer SMSF loans due to their higher interest rates and limited recourse structure, compared to traditional home loans. This is primarily because in the event of default on loan repayments, the lender can only reclaim the specific property held as collateral, and any assets or rental income within the SMSF cannot be used to offset the debt.
Upon complete repayment of the loan balance, legal ownership of the property will transfer to the SMSF. At this juncture, the SMSF can either continue to receive rental payments or opt to sell the property, with the sale proceeds being deposited into the SMSF.
Is it possible to refinance my SMSF loan?
Absolutely! The team at Broker.com.au have helped a number of our SMSF clients find lower cost property loans for their SMSFs, helping them save money and grow the assets with their fund.
How much can my SMSF borrow?
The answer to this question will depend on a number of factors:
- What type of property you are purchasing
- Location of the property
- Rental income
- Ongoing costs associated with the property
- How much cash sits in the SMSF as contribution towards deposit an purchase costs
- LVRs can range anywhere up to 90%
