SMSF Investment loans

Discussion in 'Loans & Mortgage Brokers' started by T Macdonald, 10th Dec, 2018.

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  1. T Macdonald

    T Macdonald Member

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    HI those in the know... I am curious as to what the rates are people are getting for investment loans within SMSF).

    Our broker said he can get 6.69% via Latrobe financial which seems very high?

    The loan is for $272,000.

    Tim
     
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  2. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Seems about right. The lack of mainstream lenders in the space doesnt help. Margins will likely only get wider.
     
  3. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Residential or commercial? What LVR? Full doc, lo doc or somewhere in between?

    6.69% might be high, or it might be quite a good deal. It very much depends on the circumstances. Compared to regular home loans however, SMSF lending isn't cheap. There's very little competition in this space.
     
  4. Redwood

    Redwood Well-Known Member Business Member

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    Hi there,

    What sort of property is it? The advertised rate is 5.99% so there must be a glitch as to why they are referring to 6.69% which was the rate around 3 years ago.

    As you may know SMSF loans are more expensive than normal investment loans and not many lenders are left in the market. La Trobe is killing it at the moment taking advantage of the exit of CBA & AMP, with Macquarie the only "big" lender left. Note La Trobe does not require "Financial advice" sign offs which are costly. However you will need your docs witnessed by a solicitor.

    La trobe's rate of 5.99% is a competitive rate.

    Hope that helps

    Cheers Ivan
     
  5. Lindsay_W

    Lindsay_W Well-Known Member

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    Can definitely get a better rate, 5.49% is available for SMSF loans (pending property location, serviceability etc. etc.)
     
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  6. Terry_w

    Terry_w Mortgage broker licenced 4 tax/legal advice Business Member

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    As trustee, or controller of the trustee, do you think it would be a good idea to borrow to acquire such a property?
     
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  7. Phantom

    Phantom Well-Known Member Premium Member

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    Ivan from Redwood is a specialist in this field. I would get in touch with him and see what's possible for you. Unfortunately, knowing if your current rate of 6.69% is too high or not cannot be known with the little info you provided.
     
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  8. Illusivedreams

    Illusivedreams Well-Known Member

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    We currently pay P&I 5.5% fixed for 3 years on our SMSF

    It was with Commbank which no longer offer the product.

    But at least tells you what can be achieved. This loan was fixed 6 months ago.(approx)
     
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  9. Lindsay_W

    Lindsay_W Well-Known Member

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    Good rate for a fixed SMSF loan, I believe that's what OP was asking for, just to see what other rates are out there, as I mentioned you can get 5.49% investment variable rate for SMSF loans, whether or not they qualify for them is another question altogether, depends on a number of factors, they would be best to go back to their broker and ask the question.
     
  10. JohnPropChat

    JohnPropChat Well-Known Member

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    This screenshot is dated but a quick overview of who was in the game not that long ago. AMP and CBA certainly left.

    When I asked a few months ago, LaTrobe's 5.99% was their best rate and goes up to 6.69% based on the application. Not sure if brokers can get a discount from that.

    The lower the LVR the better the rate. With Labor proposing to ban LRBAs in SMSFs, you MAY not even be able to refinance in the future

    upload_2019-1-29_17-14-50.png
     
    Last edited: 29th Jan, 2019
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  11. Perky29

    Perky29 Well-Known Member

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    There was an article here in Property Observer, which talks about DomaCom securing 50 mill worth of loans at 5.99% and up to 60% LVR for SMSF loans.
    Hopefully more lenders will return, and increase competition.
     
  12. Lindsay_W

    Lindsay_W Well-Known Member

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    Partnered with La Trobe - there is still quite a bit of competition in the SMSF space from smaller niche lenders, mainly the major/larger lenders that have pulled out it seems.
     
  13. JohnPropChat

    JohnPropChat Well-Known Member

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    Sub-60% LVR space has a fair few niche lenders and white label products. The LRBA ban is the short-term concern that will shake things up.