Can I still get an SMSF loan with NAB?

Any general questions you might have in regards to loans and finance.
Pedror3Po
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Joined: Thu Mar 28, 2019 5:32 pm

Can I still get an SMSF loan with NAB?

Postby Pedror3Po » Thu Mar 28, 2019 5:34 pm

Hey,
I’m a data analyst at a research firm in NSW. I’ve been thinking of purchasing a commercial property in Fitzroy for my self managed super fund by the end of the year. I have around $500,000 in my SMSF and the property I’m looking to purchase is currently priced at $1,000,000.

Even though I have my account with the National Bank of Australia (NAB), for some reason, they have declined my SMSF loan application. I was wondering if you could explain to me why this is happening?

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Otto Dargan
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Re: How do I apply for a first home owners grant?

Postby Otto Dargan » Thu Mar 28, 2019 5:44 pm

Hi Pedro,

Welcome to the forums.

Unfortunately, as of 2018, all of Australia’s largest banks have virtually stopped SMSF financing. These banks include Commonwealth Bank of Australia (CBA), Westpac, ANZ and NAB.

Although the regulators haven’t called for a total ban on SMSF loans, they have introduced tougher lending and capital requirements. This is why NAB, one of the only major banks to still offer commercial property loans for SMSFs made it's lending policy even stricter.

These policy changes include:
Reducing your borrowing limit
Requiring more liquid assets and cash reserves in your SMSF prior to purchasing the property and after settlement.
Requiring borrowers to be a business loan customer for at least 2 years prior to applying for an SMSF commercial loan.
Stopping interest only SMSF loans.
A requirement that SMSF members be in the accumulation phase when the loan is funded and for the duration of the loan term.
Having a cash reserve of 12 months in their SMSF account.
Cheers,
Otto
Otto Dargan
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P | 1300 889 743
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Pedror3Po
Posts: 3
Joined: Thu Mar 28, 2019 5:32 pm

Re: How do I apply for a first home owners grant?

Postby Pedror3Po » Thu Mar 28, 2019 5:54 pm

Oh! That’s concerning! Can you tell me why the large banks decided to make it so hard for people to get approved for SMSF loans? And are you telling me that there is no way for me to get my home loan approved? There has to be something I could do, can’t I?

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Otto Dargan
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Joined: Sat Sep 06, 2008 5:55 pm
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Re: How do I apply for a first home owners grant?

Postby Otto Dargan » Thu Mar 28, 2019 6:11 pm

Hey Pedro,

The reason why the banks did this is that SMSF loan applications have always been difficult for major banks to process. Banks tend to have very few credit officers who are experienced in handling these complex ownership structures.

Banks have to also tread carefully to make sure they are following the rules and set up the loan correctly as per the requirements set out under the Superannuation Industry (Supervision) Act 1993 (SIS Act).

Smaller teams mean there can be delays and mistakes when assessing the application.

Basically, the time and effort to get an SMSF loan approved doesn’t justify the return on investment for some banks.

Luckily, we have a couple of second-tier lenders that can help.

Please call us on 1300 889 743 or enquire online and one of our mortgage brokers can help you find a willing lender.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Pedror3Po
Posts: 3
Joined: Thu Mar 28, 2019 5:32 pm

Re: Can I still get an SMSF loan with NAB?

Postby Pedror3Po » Thu Mar 28, 2019 7:27 pm

Hey,

Thanks for the information! I did not know that. Can you tell me how reliable these non-major banks are? Can they provide me with the same rates that the banks would?

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Otto Dargan
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Re: Can I still get an SMSF loan with NAB?

Postby Otto Dargan » Thu Mar 28, 2019 7:28 pm

Hey Pedro,

Excellent question!

Rest assured that these smaller lenders we work with are very safe and reliable. And yes, the amount you can borrow from them will remain almost the same.

We can help you to apply for a commercial property SMSF loan where you can borrow up to 70% of the property value.

As you already have a 30% deposit, we can also negotiate on your behalf to get you the lowest interest rate possible.

Call us on 1300 889 743 or complete our free assessment form to speak to a mortgage broker who specialises in SMSF loans and who can get you competitive rates for your home loan application.
Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts


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