Find and compare SMSF home loans

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4.79%

Variable

5.33%

Freedom Lend

$1.7k

Redraw facility
Offset Account
Borrow up to 65%
Extra Repayments
Interest Only
Owner Occupied

1.97

/ 5
More details

4.95%

Variable

5.38%

Liberty Financial

$1.7k

Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied

1.33

/ 5
More details

5.29%

Variable

5.44%

Freedom Lend

$1.3k

Redraw facility
Offset Account
Borrow up to 65%
Extra Repayments
Interest Only
Owner Occupied

1.97

/ 5
More details

4.99%

Variable

5.48%

Mortgage House

$1.8k

Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied

1.71

/ 5
More details

4.99%

Variable

5.52%

Freedom Lend

$1.8k

Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied

1.97

/ 5
More details

4.99%

Variable

5.57%

Rate Chaser Home Loans

$1.8k

Redraw facility
Offset Account
Borrow up to 65%
Extra Repayments
Interest Only
Owner Occupied

1.76

/ 5
More details

5.49%

Variable

5.64%

Freedom Lend

$1.4k

Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied

1.97

/ 5
More details

5.50%

Variable

5.68%

Regional Australia Bank

$1.8k

Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied

1.40

/ 5
More details

5.95%

Fixed - 1 year

5.72%

Regional Australia Bank

$1.9k

Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied

0.87

/ 5
More details

5.69%

Variable

5.76%

La Trobe Financial

$1.9k

Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied

1.33

/ 5
More details

6.01%

Fixed - 2 years

5.78%

Regional Australia Bank

$1.9k

Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied

0.87

/ 5
More details

5.29%

Variable

5.82%

Freedom Lend

$1.8k

Redraw facility
Offset Account
Borrow up to 75%
Extra Repayments
Interest Only
Owner Occupied

1.97

/ 5
More details

6.08%

Fixed - 3 years

5.84%

Regional Australia Bank

$1.9k

Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied

0.87

/ 5
More details

5.39%

Variable

5.97%

Rate Chaser Home Loans

$1.8k

Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied

1.76

/ 5
More details

6.75%

Fixed - 5 years

6.23%

Regional Australia Bank

$2.1k

Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied

0.87

/ 5
More details

6.01%

Fixed - 2 years

6.25%

LJ Hooker Home Loans

$1.9k

Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied

0.72

/ 5
More details

6.06%

Fixed - 3 years

6.25%

LJ Hooker Home Loans

$1.9k

Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied

0.72

/ 5
More details

6.01%

Fixed - 1 year

6.28%

LJ Hooker Home Loans

$1.9k

Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied

0.72

/ 5
More details

6.21%

Fixed - 4 years

6.28%

LJ Hooker Home Loans

$2k

Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied

0.72

/ 5
More details

6.27%

Variable

6.32%

LJ Hooker Home Loans

$2k

Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied

0.72

/ 5
More details

What is an SMSF loan?

An SMSF loan describes money loaned or borrowed by a Self-Managed Super Fund (SMSF) and its trustees, for the purpose of making an investment that can help grow the SMSF members' retirement savings. 

An SMSF is a superannuation fund managed by the trustees of that fund, who are also the members of that fund. A self-managed superannuation fund may not be the best option for every Australian's financial situation --consider seeking financial advice before you enquire about an SMSF trust.

How does an SMSF work?

Acting essentially as a ‘do-it-yourself’ superannuation fund, members of an SMSF are responsible for complying with Australian superannuation and tax laws, and must make investment decisions on behalf of the fund. 

As the purpose of an SMSF is to generate returns for the trustees’ retirement, borrowing or lending money must be for the sole benefit of the SMSF, not the individual trustees. Investments must also not generate value to be enjoyed in the present day, but focus on returns for when the trustees retire.

Setting up a Self-Managed Super Fund for the purpose of accessing your super early, renovating your home, or purchasing assets that benefit an individual trustee is illegal. As such, it’s important for trustees to seek professional advice from a financial adviser before setting up an SMSF.

How are SMSFs allowed to invest their funds?

SMSFs can invest in conventional assets such as shares, term deposits, managed funds and property.

SMSFs can also buy ‘collectibles’ such as artwork, jewellery, antiques, coins, stamps, vintage cars and wine – although there are special rules that apply to collectibles.

Investments must be made on an arm’s length basis, which means that assets must be bought and sold at market prices, while income must reflect the market rate of return.

As a general rule, SMSFs can’t buy assets from members or related parties.

What is an SMSF investment strategy?

All SMSFs are required to have an investment strategy, which should explain what assets the fund will buy and what objectives it will pursue. This strategy must be reviewed regularly.

Issues to consider include how much risk the SMSF will take, how easily its assets can be converted into cash and how it will pay out benefits.

Borrowing from an SMSF

Some people assume that an SMSF is beneficial as it can provide them with early access to funds, or empower them to use their SMSF to borrow money for personal use. 

This is inaccurate and doing so can cost you dearly. Using money from an SMSF to fund a purchase must be for the benefit of the fund, not the individual members or trustees.

Borrowing from an SMSF

Some people assume that an SMSF is beneficial as it can provide them with early access to funds, or empower them to use their SMSF to borrow money for personal use. 

This is inaccurate and doing so can cost you dearly. Using money from an SMSF to fund a purchase must be for the benefit of the fund, not the individual members or trustees.

When is an SMSF loan illegal?

SMSF borrowing for individual gain is illegal. If you are caught borrowing money from an SMSF for the purpose of personal benefit, the fund can be made ‘non-complying’ by the ATO. This means you can lose access to up to half of the funds in your SMSF. You can also incur serious penalties, including thousands of dollars in fines, and potentially be sentenced to jail.

As a rule, SMSF trustees are generally not allowed to borrow money at all, especially when they are borrowing money to benefit any related parties. These related parties can include SMSF members, friends, relatives or business associates. Trustees are also not allowed to borrow money that does not generate a market return. This is because a super fund is run for the sole purpose of providing benefits to members when they retire.

An SMSF loan is legal when it is a Limited Recourse Borrowing Arrangement (LBRA). 

An LBRA is a loan taken out by an SMSF trustee with a third party lender, to purchase a single asset (or collection of identical assets that have the same market value) that provides investment returns to the SMSF. 

This type of SMSF loan is generally a long-term investment, to provide a market return, and is legal.

If the SMSF defaults on the LBRA, the third party lender’s rights are limited to recovering only that asset, so that the other assets owned by the SMSF remain protected.

Why do you need an LBRA for an SMSF loan?

When borrowing from an SMSF in Australia, trustees must organise an LBRA. If they do not, they are breaking the ATO superannuation laws. If an auditor reports that your SMSF has borrowed money without an LBRA, you may be ordered to sell the property and your fund could be made ‘non-complying’.

There are many costs involved with selling a property, and if you borrow money without such an arrangement, you may have to sell the property for less than the SMSF paid for it. This can also result in thousands of dollars in fines for the individual trustee who set up the illegal loan.

Borrowing money with an LBRA can work, however it’s important that you follow all the rules and speak with an SMSF professional before you sign anything.

You can learn more about limited recourse borrowing arrangements from the ATO.

Can you purchase property with SMSF funds?

As long as you follow the rules, and the reason for purchasing property is to create financial returns that are funnelled directly back into your SMSF, you may be able to purchase property with an SMSF loan. 

Any property purchased with an SMSF loan must be for the sole benefit of the SMSF, not the individual trustees. The property must provide a market return, which will be used to provide retirement benefits for the super fund members when they reach the retirement age of 65.

While you can both borrow and loan money from an SMSF for the purpose of buying property, there are many restrictions, regulations and conditions that you must meet to ensure that the purchase is legal.

If the purchase is not legal as per the Australian Taxation Office (ATO) guidelines, you may risk losing half of the assets in your SMSF, and face thousands of dollars in fines.

Self Managed Super Funds restrict investments that concern related parties, like members, friends and family. This means you cannot purchase property that a related party owns or has owned. 

However, a market value purchase of business real property is a legal property purchase.

What is business real property?

Business real property generally refers to land and buildings used wholly and exclusively for business purposes. If you are purchasing business real property from SMSF finance, you must also ensure this investment meets your SMSF investment strategy to maximise the returns of the fund.

There are some exceptions to the rule that land and buildings must be wholly and exclusively used for business purposes. If, for example, you choose to purchase a rural working farm with funds from the SMSF, and there is a dwelling on the farm that is for private use, you may still be able to count this purchase as business real property.

To do this, you need to prove that the rural farm is predominantly for business use, and the dwelling must be in an area no more than two hectares.

You can learn more about business real property from the ATO.

Can you loan money for property with funds from an SMSF?

Generally, an SMSF is not allowed to loan money, unless SMSF lending is in the best interests of the fund members, and complies with your SMSF investment strategy.

An SMSF cannot under any circumstances loan money to or provide direct financial assistance to any related party, nor can the fund guarantee loans for members or their relatives.

However, an SMSF can legally loan money to an individual or business, to generate a positive return for super members.

If your SMSF is considering loaning money to an individual or business, it must be in the best interests of all fund members. It must also be for the sole purpose of generating a market return for members when they retire.

For instance, a business loan that charges interest over a 10-year period may qualify as a legal SMSF loan, as long as it matches the SMSF investment strategy and does not involve any related party.

If your fund is audited, and it is found that a loan arrangement is not in the best interests of the members of the SMSF, your fund may be labelled ‘non-complying’ by the ATO. This means the SMSF could lose up to half of its assets, and fund members could face serious penalties. 

This is why it is best to speak to a financial adviser or an SMSF professional before you draft any loan arrangements on behalf of the SMSF.

What are the risks of buying property with SMSF loans?

  • Higher costs: Specialist SMSF home loans tend to cost more than typical mortgage products. This is partially because there are fewer lenders offering SMSF home loans. This could also potentially make it harder to successfully refinance. 
  • Requires cash flow: The repayments on your SMSF loan will need to come out of your SMSF, so you’ll need to keep enough liquidity in the fund to manage these payments.
  • Harder to cancel: An SMSF property loan can’t be easily unwound if it becomes necessary (such as if your documents and contract aren’t set up properly), meaning you may be forced to sell the property, possibly at a loss to the fund.
  • Potential tax losses: Unlike a typical property investment where the borrower can benefit from negative gearing, with an SMSF home loan you can’t offset tax losses from the property against your taxable income outside the fund.  
  • Can’t alter the property: You can’t change the character of the property until you pay off the SMSF property loan. You may be able to make minor repairs, but major renovations would be off the table.

How do I purchase property through my SMSF?

  • Calculate what you can afford: You’ll want to be confident that your SMSF can afford the loan interest repayments on any potential mortgage before you apply. You’ll likely need to have at least $150,000 or more in assets in the SMSF, and keep the fund topped up with cash from super contributions and potential rent on the property to cover the repayments, plus stamp duty and other ongoing fees and mortgage costs -- consider checking the SMSF loan's comparison rate.
  • Find a property: It can be a residential property or a commercial property, but it can't be associated with the fund’s members or relatives (e.g. can’t be bought from, lived in, or rented by a fund member or relative of a fund member).
  • Set up an LRBA: This separate legal entity will look after the mortgage on the property on behalf of the SMSF, partially to help protect the fund’s assets in case of a default.
  • Apply for the loan: This process is broadly similar to applying for a typical investment property. However, because of the complexity of the regulations surrounding SMSFs, and the specialised requirements for some SMSF loans (for example, some lenders will require personal guarantees from the SMSF trustees), it may be worth seeking financial advice from a mortgage broker or similar financial expert. 

How much can I borrow with an SMSF home loan?

Much like when you apply for a more traditional home loan, the amount you can borrow with an SMSF loan will partly depend on how much you can afford in loan repayments. The more cash you have going into your SMSF as super contributions, dividends and interest (possibly also including forecast rental income from the investment property you’re buying), the higher the potential loan amount you may be able to put towards your investment property. Depending on the loan term and interest rate of the loan you’re applying for (which may be a variable rate or fixed for a limited time), this may allow you to borrow more money to purchase a higher-value property.

Much like a typical investment home loan, you’ll also need to pay a deposit when you buy an investment property with an SMSF loan. Due to the extra risk and complexity of SMSF loans, your SMSF will likely have to provide a higher percentage of the property’s value as deposit up front (perhaps 30 per cent or more, rather than the more typical 20 per cent), for a lower loan to value ratio (LVR).

Frequently asked questions

What is bridging finance?

A loan of shorter duration taken to buy a new property before a borrower sells an existing property, usually taken to cover the financial gap that occurs while buying a new property without first selling an older one.

Usually, these loans have higher interest rates and a shorter repayment duration.

Who offers 40 year mortgages?

Home loans spanning 40 years are offered by select lenders, though the loan period is much longer than a standard 30-year home loan. You're more likely to find a maximum of 35 years, such as is the case with Teacher’s Mutual Bank

Currently, 40 year home loan lenders in Australia include AlphaBeta Money, BCU, G&C Mutual Bank, Pepper, and Sydney Mutual Bank.

Even though these lengthier loans 35 to 40 year loans do exist on the market, they are not overwhelmingly popular, as the extra interest you pay compared to a 30-year loan can be over $100,000 or more.

What is an ombudsman?

An complaints officer – previously referred to as an ombudsman -looks at formal complaints from customers about their credit providers, and helps to find a fair and independent solution to these problems.

These services are handled by the Australian Financial Complaints Authority, a non-profit government organisation that addresses and resolves financial disputes between customers and financial service providers.

How is the flexibility score calculated?

Points are awarded for different features. More important features get more points. The points are then added up and indexed into a score from 0 to 5.

What is a building in course of erection loan?

Also known as a construction home loan, a building in course of erection (BICOE) loan loan allows you to draw down funds as a building project advances in order to pay the builders. This option is available on selected variable rate loans.

Does Real Time Ratings' work for people who already have a home loan?

Yes. If you already have a mortgage you can use Real Time RatingsTM to compare your loan against the rest of the market. And if your rate changes, you can come back and check whether your loan is still competitive. If it isn’t, you’ll get the ammunition you need to negotiate a rate cut with your lender, or the resources to help you switch to a better lender.

How much deposit do I need for a home loan from NAB?

The right deposit size to get a home loan with an Australian lender will depend on the lender’s eligibility criteria and the value of your property.

Generally, lenders look favourably on applicants who save up a 20 per cent deposit for their property This also means applicants do not have to pay Lenders Mortgage Insurance (LMI). However, you may still be able to obtain a mortgage with a 10 - 15 per cent deposit.  

Keep in mind that NAB is one of the participating lenders for the First Home Loan Deposit Scheme, which allows eligible borrowers to buy a property with as low as a 5 per cent deposit without paying the LMI. The Federal Government guarantees up to 15 per cent of the deposit to help first-timers to become homeowners.

Mortgage Calculator, Deposit

The proportion you have already saved to go towards your home. 

How much information is required to get a rating?

You don’t need to input any information to see the default ratings. But the more you tell us, the more relevant the ratings will become to you. We take your personal privacy seriously. If you are concerned about inputting your information, please read our privacy policy.

What is breach of contract?

A failure to follow all or part of a contract or breaking the conditions of a contract without any legal excuse. A breach of contract can be material, minor, actual or anticipatory, depending on the severity of the breaches and their material impact.

Savings over

Select a number of years to see how much money you can save with different home loans over time.

e.g. To see how much you could save in two years by switching mortgages,  set the slider to 2.

Mortgage Calculator, Property Value

An estimate of how much your desired property is worth. 

What is a redraw fee?

Redraw fees are charged by your lender when you want to take money you have already paid into your mortgage back out. Typically, banks will only allow you to take money out of your loan if you have a redraw facility attached to your loan, and the money you are taking out is part of any additional repayments you’ve made. The average redraw fee is around $19 however there are plenty of lenders who include a number of fee-free redraws a year. Tip: Negative-gearers beware – any money redrawn is often treated as new borrowing for tax purposes, so there may be limits on how you can use it if you want to maximise your tax deduction.

Interest Rate

Your current home loan interest rate. To accurately calculate how much you could save, an accurate interest figure is required. If you are not certain, check your bank statement or log into your mortgage account.

Why is it important to get the most up-to-date information?

The mortgage market changes constantly. Every week, new products get launched and existing products get tweaked. Yet many ratings and awards systems rank products annually or biannually.

We update our product data as soon as possible when lenders make changes, so if a bank hikes its interest rates or changes its product, the system will quickly re-evaluate it.

Nobody wants to read a weather forecast that is six months old, and the same is true for home loan comparisons.

What does going guarantor' mean?

Going guarantor means a person offers up the equity in their home as security for your loan. This is a serious commitment which can have major repercussions if the person is not able to make their repayments and defaults on their loan. In this scenario, the bank will legally be able to the guarantor until the debt is settled.

Not everyone can be a guarantor. Lenders will generally only allow immediate family members to act as a guarantor but this can sometimes be stretched to include extended family depending on the circumstances.

What is the flexibility score?

Today’s home loans often try to lure borrowers with a range of flexible features, including offset accounts, redraw facilities, repayment frequency options, repayment holidays, split loan options and portability. Real Time Ratings™ weights each of these features based on popularity and gives loans a ‘flexibility score’ based on how much they cater to borrowers’ needs over time. The aim is to give a higher score to loans which give borrowers more features and options.

Mortgage Calculator, Loan Purpose

This is what you will use the loan for – i.e. investment. 

How personalised is my rating?

Real Time Ratings produces instant scores for loan products and updates them based what you tell us about what you’re looking for in a loan. In that sense, we believe the ratings are as close as you get to personalised; the more you tell us, the more we customise to ratings to your needs. Some borrowers value flexibility, while others want the lowest cost loan. Your preferences will be reflected in the rating. 

We also take a shorter term, more realistic view of how long borrowers hold onto their loan, which gives you a better idea about the true borrowing costs. We take your loan details and calculate how much each of the relevent loans would cost you on average each month over the next five years. We assess the overall flexibility of each loan and give you an easy indication of which ones are likely to adjust to your needs over time. 

What is appreciation or depreciation of property?

The increase or decrease in the value of a property due to factors including inflation, demand and political stability.