Does St George offer SMSF home loans?

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Dewey
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Joined: Thu Jun 13, 2019 3:43 pm

Does St George offer SMSF home loans?

Postby Dewey » Thu Jun 13, 2019 3:45 pm

I’m reviewing my super fund’s diversification, liquidity and liabilities. It primarily holds ASX listed securities, bonds, term deposits and I’m looking to add investment real estate to diversify the fund’s holdings. There are a few commercial properties I’m considering and once I’ve finalised it, I’ll be needing a 75% LVR commercial SMSF loan. Does St George offer SMSF home loans?

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Otto Dargan
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Re: Does St George offer SMSF home loans?

Postby Otto Dargan » Thu Jun 13, 2019 4:06 pm

Hello Dewey. Welcome to the forums.

St George along with Westpac, Macquarie, AMP, CBA, NAB, BankWest, ANZ, RAMS have all pulled out of SMSF (self-managed superannuation fund) loans. NAB although technically still offers SMSF loans but requires $5 million in the fund, so no one actually qualifies for it. However, there are other banks and specialist lenders who still provide SMSF loans.

With an SMSF commercial loan:
  • You can borrow up to 75% of the property value for a commercial property.
  • Borrow up to $10 million (higher on a case by case basis)
  • Loan terms up to 30 years for commercial security properties (>20 years is on a case by case basis).
  • Interest only repayments for up to 5 years.
  • Discounted SMSF interest rates are available from some lenders.
Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for an SMSF commercial loan.

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

Dewey
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Joined: Thu Jun 13, 2019 3:43 pm

Re: Does St George offer SMSF home loans?

Postby Dewey » Thu Jun 13, 2019 5:15 pm

How do lenders calculate serviceability for self-managed superannuation funds? Will lenders consider additional contributions if the current SMSF income is insufficient to cover the repayments?

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Otto Dargan
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Does St George offer SMSF home loans?

Postby Otto Dargan » Thu Jun 13, 2019 6:11 pm

Hi Dewey,

It differs from lender to lender.
Some lenders will only accept 80% of the total income in your fund, whereas others will use 100% of your income. All lenders will use 80% of the proposed rental income to allow for expenses such as management fees and repairs. This is why there can be a huge disparity between the maximum loan sizes offered by different banks. You can use our SMSF borrowing power calculator to work out a tentative figure.

Lenders will definitely consider additional voluntary contributions to your superannuation along with the following incomes:
  • Employer superannuation contributions.
  • Rent income on the new investment property.
  • SMSF dividend income (conditions apply).
  • SMSF interest income (conditions apply).

By changing the loan structure and applying with the right lender you can significantly increase your maximum loan size.

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

Dewey
Posts: 3
Joined: Thu Jun 13, 2019 3:43 pm

Re: Does St George offer SMSF home loans?

Postby Dewey » Thu Jun 13, 2019 6:31 pm

Yeah, I’ve filled up your online enquiry form. When can I expect a call? And why is that lenders are all following each other out of SMSF loans?

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Otto Dargan
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Location: Sydney, Australia
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Re: Does St George offer SMSF home loans?

Postby Otto Dargan » Thu Jun 13, 2019 7:37 pm

Hi Dewey,

That’s great, please expect a call from one of our specialist mortgage brokers within the next 24-48 hours.

A combination of different factors contributed to lenders pulling out of SMSF loans. SMSF loans are seen as a high reputational risk to some banks in the event that you were to default on your mortgage. These banks want to avoid negative publicity, particularly after a handful of case studies were used as examples in the recent Royal Commission into the banking and financial services industry. Basically, some borrowers were recommended the wrong products and didn’t seek adequate financial advice before purchasing a property for their SMSF.

Most people that have a self-managed superannuation fund are not necessarily high net worth individuals, which again relates back to potential negative personality.

However, the other reason some lenders have stopped SMSF loans has to do with the complexity of meeting the regulatory requirements - the return on investment is not worth the risk with some lenders because, again, they don’t tend to be large loans.

Please give us call on 1300 889 743 if you have any other queries or you can post another question here.

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


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