Are you looking to buy a property for your self-managed superannuation fund (SMSF)?

Banks will be looking at your personal financial stability and the size of your deposit, as well as the liquidity position of your trust.

So what are the capital requirements and how big of a deposit do you need for an SMSF loan?

Is your deposit enough?

To buy a residential property for your SMSF, you generally need 20-25% of the property value as a deposit.

You also need an extra 5% of the property value to cover the costs of completing the purchase. This little bit extra covers such expenses as stamp duty, mortgage transfer fees, the costs of a conveyancer and other legal expenses.

What if I want to buy a commercial property?

For commercial properties, you need at least a 30% deposit for an SMSF loan plus 5% for the costs of completion.


Are there no deposit solutions for SMSF loans?

No there isn’t, however, existing funds in your managed super account can be used as a deposit. You can move these funds to your SMSF so, effectively, you don’t need a deposit!

There can be huge differences in lending policy and interest rates depending on whether we can get you approved with the lender’s residential or commercial banking arm!

Read these tips about comparing SMSF loans.

Call us on 1300 889 743 or complete our free assessment form and speak to one of our mortgage brokers about borrowing for SMSF.


How will they assess my personal financials?

Banks will go through the same due diligence as they would with a typical home loan application.

In most cases, they will ask for your most recent payslip if you’re PAYG or your last two years tax returns if you’re self employed. This will show your after-tax income.

They will also look to see that you have stable employment, all of which gives them confidence in your capacity to make the SMSF loan repayments.

The great thing is that there are lenders that will also take into account proposed rental income for the property that you’re buying. Most will use up to 80% of rental income but some lenders will use 100%.

Borrowing at the maximum Loan to Value Ratio (LVR) comes down to choosing the right lender.


What about my SMSF financials?

You’ll firstly need to provide a copy of the trust deed for the SMSF that explains the restrictions and rules around borrowing money and acquiring a beneficial interest in the asset you want to buy.

If the bank is satisfied, there is usually a requirement for the SMSF to have a minimum net worth of at least $200,000 including assets and dividends from existing investments. However, not all lenders require you to have this in order to borrow.

Will the bank use income from beneficiaries of the SMSF?

Yes! Some will use this income to support your application if a personal guarantee is provided.

You can use our SMSF borrowing power calculator to see how some of our banks would assess your situation.


Don’t forget about the liquidity requirement

After the total cost of purchasing the residential or commercial property is taken into account, you may have to pass what is known as a post-settlement liquidity requirement with some banks.

This means that there must be a certain amount of income and assets left over in the trust after your complete the purchase.

Generally, you need around 10-20% of the total assets remaining after the purchase. With one lender, this jumps up to 40% if you’re near retirement age!

However, not all lenders have a liquidity requirement!


Not sure if you have enough deposit for an SMSF loan?

Call us on 1300 889 743 or complete our online enquiry form and we can properly assess your situation.

We can then match you with a lender that will accept different types of income in order for you to qualify for an SMSF loan.

Why use us?

We aim to set an example by delivering what we promise: a higher level of service, better advice and better home loans.

pin_drop

Australia-wide services

We finance properties anywhere in Australia for people anywhere in the world.

monetization_on

Get incredible interest rates

Our relationships with our panel of lenders allow us to negotiate your interest rate.

thumb_up

We get tough loans approved

We can help you navigate the often complex pre-approval and application process.

favorite

Our customers love us

We receive hundreds of love letters from our customers.

Discover more reasons to use Home Loan Experts

How we find you the right solution

We get a complete understanding of where you’re at and what your ultimate goals are.
You’ll get a recommendation in just a few simple steps.

enquiry form icon
1

Complete our free assessment form or call us.

lender search icon
2

We assess your situation.

panel of lenders icon
3

We look at al the options from our panel of lenders.

recommended deal icon
4

We will find you the most suitable home loan deals.

Testimonials for Home loan experts

google logo white

4.7

from 200+ reviews
facebook logo white

4.7

from 300+ reviews
product review logo white

4.8

from 500+ reviews

Facts
about us

30+

lenders on
our panel

$4B+

lent Australia-wide
and counting

Westpac Logo
ANZ Logo
NAB Logo
AMP Logo
Adelaide Bank
Firstmac Logo
CommonwealthBank Logo
St.george Logo
ING logo
Homeloans Logo
Macquare bank logo
Suncorp logo
pepper money logo
mebank logo
bankwest logo
75%

of our borrowers get
approved with a major bank

95%

of our borrowers get a discount
below the bank standard variable rate