Self-Managed Super Fund (SMSF) loans are becoming increasingly popular, with Sphere Home Loans seeing an uptick in the number of clients enquiring about these.

A Self-Managed Super Fund loan is a loan that your Super Fund takes out on your behalf to purchase an investment property. This can be done to diversify the funds portfolio, and some people much prefer to have their largest investment include property.

SMSF lending has had a rough time in the last few years. Major lenders pulled out of SMSF lending all together and as a result the rates of the products already held have been going up, with no chance to renegotiate as they are not interested in keeping the business. Traditionally SMSF lending has been an expensive ‘changeover’ so it was rare to advise a refinance. This has now changed. Lenders that are still offering the products are now streamlining the way they do things and reducing the upfront costs to move, making it a more attractive and viable option for many.

Clients now have the option not only to continue to invest in their Self-Managed Super Fund but also to get a more competitive price on their current SMSF lending, which is the biggest win we’ve seen in this area for years.

If you have an SMSF loan with a major bank, chances are the rate is sky high. This is because they no longer wish to retain this business. So this means it is time to review, and the assistance of an independent mortgage broker will be hugely beneficial here.

BENEFITS OF REFINANCING YOUR CURRENT SMSF LOAN

Some of the possible benefits of refinancing your current SMSF loan include:

🌱 lower rates

🌱 a better and more flexible product

🌱 a longer loan term and the ability to pay your loan earlier if you wish (or even have an offset)

WHAT MISTAKE ARE WE SEEING

The most common mistake that we are seeing people make with existing SMSF loans is misunderstanding at the time of purchasing the first SMSF property that the security cannot be used to buy another property in the future.

It's crucial to recognise that the security of the initial property cannot be utilised to acquire another property. Therefore, if you intend to purchase additional properties within your SMSF, consider making minimum repayments. Unlike outside super, where you can leverage the equity in your home or investment property to buy another, the equity gained from paying off an SMSF property early doesn't operate similarly. Making minimum repayments can potentially increase your cash reserves within the super fund for future investments.

HOW SPHERE HOME LOANS CAN HELP

At Sphere Home Loans we have an SMSF specialist, Karen Kirby, and whether it be buying in your Self-Managed Super Fund or reviewing your current SMSF loan, Karen can expertly assist you navigate the world of SMSF lending.

My wife and I have had our SMSF property for many years and the current interest rate had increased to over 9%. Karen from Sphere Home Loans had a solution to refinance our current loan and managed to save us over $5000 per year in interest.

The process was easy and Karen informed us the whole way through the process. I would highly recommend Karen and Sphere Home Loans

Ryan, SMSF Refinancer

We decided to purchase a property in Brisbane using our Super Fund. We were incredibly impressed with the whole team at Sphere Home Loans, but a special thank you goes to Karen Kirby who is a fabulous communicator and helped us navigate a very complicated process.

If you are looking for an efficient team that goes out of their way to help you then we highly recommend Sphere Home Loans for assistance with your next property finance.

Doug & Kylie