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SMSF Loans

Latest tips and helpful insights to help you manage your SMSF loans better.

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Lender	Advertised rate	Comparison rate*	Monthly repayment	Rate Type	Ongoing Fee	Upfront Fees	Max LVR	as ofDecember 21, 2024

	6.99^%_p.a.	7.01^%_p.a.	^$2,659	Variable	N/A	^$720	70^%	More details
	SMSF 70 Refinance only offer. No application fee and no settlement fee No monthly, annual or ongoing fees Access your SMSF loan via our easy-to-use online app Smart Money
Disclosure
SMSF 70 Refinance only offer. No application fee and no settlement fee No monthly, annual or ongoing fees Access your SMSF loan via our easy-to-use online app Smart Money More details Disclosure
	7.24^%_p.a.	7.26^%_p.a.	^$2,726	Variable	^$0	^$710	70^%	More details
	SMSF 70
Disclosure
SMSF 70 More details Disclosure
	7.25^%_p.a.	7.65^%_p.a.	^$2,729	Variable	^$30	^$825	80^%	More details
	Residential SMSF (LVR <80%)
Residential SMSF (LVR <80%) More details
	7.75^%_p.a.	8.13^%_p.a.	^$2,866	Variable	^$0	^$445	60^%	More details
	SMSF Loan >60% LVR
SMSF Loan >60% LVR More details
	7.49^%_p.a.	7.51^%_p.a.	^$2,794	Variable	^$0	^$720	80^%	More details
	SMSF 80 Available for Purchase and Refinance No application fee and no settlement fee No monthly, annual or ongoing fees
Disclosure
SMSF 80 Available for Purchase and Refinance No application fee and no settlement fee No monthly, annual or ongoing fees More details Disclosure
	7.75^%_p.a.	7.83^%_p.a.	^$2,866	Variable	^$0	^$995	80^%	More details
	SMSF Residential
SMSF Residential More details
	7.74^%_p.a.	7.76^%_p.a.	^$2,863	Variable	^$0	^$710	80^%	More details
	SMSF 80
Disclosure
SMSF 80 More details Disclosure
	8.19^%_p.a.	9.11^%_p.a.	^$2,988	Variable	^$395	^$1,185	65^%	More details
	Ocean SMSF 90 P&I
Ocean SMSF 90 P&I More details

Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of December 21, 2024. View disclaimer.

Important Information and Comparison Rate Warning

Buying a property through an SMSF loan Buying a property through an SMSF using an LRBA How does it work? What do you need to do before you borrow? Which lenders offer SMSF loans? Frequently asked questions

Buying a property through an SMSF loan

It is possible to get a loan to buy a property through your SMSF, but it’s a highly specialised and complex topic and strict rules apply.

Australian residents who currently have an SMSF, or are in the process of establishing an SMSF, can take out an SMSF loan to purchase or refinance a residential or commercial investment property.

Buying a property through an SMSF using an LRBA

All SMSF loans need to be taken out through a limited recourse borrowing arrangement (LRBA), which means that in order to limit the recourse of the lender, a separate trust and trustee have to be set up to minimise the risk to other assets in the fund.

In more simple terms, if the SMSF is unable to continue making repayments on the loan and falls into arrears, the lender will try and recover its losses by seizing the assets. Because the property is in a separate trust to the SMSF, the lender can’t pursue the assets in the SMSF which means the assets are protected from the risk of being repossessed by the lender.

There are a few things you need to consider before entering into an LRBA. These include whether the asset you’re using it to purchase passes the sole purpose test, if the loan can be sold to another party, and whether or not the SMSF can cope with an interest rate rise.

As well as using your SMSF to purchase an investment property, you can also use borrowed cash from an LRBA to pay for maintenance and repairs to the property that is part of the SMSF, however, you cannot use these funds to make improvements/additions to the property, such as adding a granny flat or an extension.

How does it work?

The actual process of buying a property through an LRBA isn’t too dissimilar to a regular property purchase, however, the difficulty lies in processing the application. If the loan application isn’t properly structured or compliant, there can be hefty fines of over $200,000 for trustees. This is why it’s strongly recommended to seek out the expert help of an accountant or mortgage broker.

This is generally how the application process works when purchasing an investment property through an LRBA:

You, the trustee, and other trustees (if applicable) find an investment property you want to purchase.
A custodian (also known as a bare trustee) is then appointed for the property. They hold the property title on the trustee’s behalf until the loan has been paid off.
You submit the loan application with all the documentation.
The custodian then has to issue payment for the deposit and the contracts for the purchase of the property are exchanged.
Provided the lender approves your loan application, the custodian will then put the property up as security with the lender so the transaction can be finalised, and pay the stamp and legal costs.
After the loan has reached settlement, you will start making the loan repayments and collecting rent. If the rent isn’t enough to cover the repayments, the difference must be made up from internal SMSF funds.
After the loan has been fully repaid, the title can be transferred from the custodian to the SMSF.

What do you need to do before you borrow?

It’s extremely important to seek out independent legal and financial advice about your SMSF borrowing money to purchase an investment property. Because SMSF loans are a very niche and complex topic, it’s important to make sure you understand the legislation around what types of properties you’re allowed to purchase, and what restrictions there are on the investment property. For example, if you’re buying a residential property as an investment, you’re not allowed to live in the property.

Which lenders offer SMSF loans?

There aren’t many lenders who offer SMSF loans in Australia anymore due to their complexity and small profit margins. At the time of writing, these lenders offer SMSF loans:

Loans.com.au
Firstmac
La Trobe Financial
Liberty Financial
Bank of Queensland (BOQ)
Switzer Home Loans
Mortgage House
Freedom Lenders
Reduce Home Loans
Rate Chaser Home Loans
LJ Hooker Home Loans
Regional Australia Bank

SMSF Loan FAQs

Can I get low interest rates?

The kind of interest rate will depend on the lender you apply with as there can be big differences in pricing between lenders. This is why it’s always a good idea to shop around and compare.

Can you live in the property?

You cannot buy a property in your SMSF that you intend to live in as a home or rent for yourself or another trustee. You also cannot have related parties living in the property or renting it.

What kinds of properties can your SMSF purchase?

An SMSF can be used to buy a residential property or a commercial property, with commercial properties generally being more popular among investors. Residential properties come with several restrictions such as not being able to live in the property.

Are there no deposit SMSF loans?

No there isn’t. At a minimum, you need 24%-25% of the purchase price to cover the 20% deposit and other costs like stamp duty. However, the existing funds in your superannuation can be used as a deposit. You can move these funds to your SMSF and use them as a deposit to buy a property, meaning you don’t need to save up a deposit like you would for a traditional property purchase.

With the lender accept other forms of income?

It may vary from lender to lender, but generally speaking, many lenders won’t accept income from shares or interest from the current assets of your trust. If you’re selling an asset of your trust to use for the deposit, this is also generally not accepted.

Will the lender accept my super contributions?

If you’re close to retirement age, the lender may not accept your super contributions. If this is the case and you no longer have personal income, your super contributions will cease and the lender may shorten the loan term or reduce the amount of the loan so the rental income will be enough to cover the loan repayments.

How long does it take to get approval?

It can take a lot longer to get approval for an SMSF loan than a regular home loan because the application process is very complex. It generally takes one week to get together the documents required to apply for the loan, and another week for the lender to assess and pre-approve the loan.

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We strive to cover a broad range of products, providers, and services; however, we do not cover the entire market. Products in our comparison tables are sorted based on various factors, including product features, interest rates, fees, popularity, and commercial arrangements.

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Comparison Rate Warning and Base Criteria

For home loans, the base criteria include a $400,000 loan amount over 30 years. These rates are only examples and may not include all fees and charges.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

Monthly Repayment Figures

Monthly repayment figures are estimates that exclude fees. These estimates are based on the advertised rates for the specified term and loan amount. Actual repayments will depend on your circumstances and interest rate changes.

Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you.

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SMSF Loans

SMSF 70

SMSF 70

SMSF 70

SMSF 70

Residential SMSF (LVR <80%)

Residential SMSF (LVR <80%)

SMSF Loan >60% LVR

SMSF Loan >60% LVR

SMSF 80

SMSF 80

SMSF Residential

SMSF Residential

SMSF 80

SMSF 80

Ocean SMSF 90 P&I

Ocean SMSF 90 P&I

Buying a property through an SMSF loan

Buying a property through an SMSF using an LRBA

How does it work?

What do you need to do before you borrow?

Which lenders offer SMSF loans?