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SMSF loans may be down but they're not out

SMSF loans may be down but they're not out

Commonwealth Bank has become the only major bank to offer SMSF home loans, alongside a number of smaller lenders.

Macquarie Bank, Bendigo Bank, Bank of Queensland and AMP Bank also offer SMSF home loans, as do 13 other customer-owned institutions and non-bank lenders.

However, as of 1 August, Westpac and its subsidiaries – St.George Bank, Bank of Melbourne and BankSA – have left the SMSF market. They are no longer accepting applications from new borrowers, although they will continue to service borrowers with existing SMSF home loans.

NAB exited SMSF lending in 2015 but also continues to service existing customers, while ANZ has never offered SMSF home loans.

Smaller lenders making the running

RateCity.com.au money editor Sally Tindall said it’s getting harder for Australians to buy property through their superannuation, but that it’s far from impossible.

Commonwealth Bank is now the sole big four bank to offer SMSF loan products,” she said.

“We’ve also seen other lenders tighten serviceability rules, which has further limited people’s options.

“However, even though the Financial System Inquiry in 2014 recommended banning SMSF home loans, there is still plenty of life left in the sector.

“RateCity.com.au research has found 18 different institutions that allow limited-recourse borrowing arrangements. Many are smaller lenders, so they might not be on your radar.

“It’s important to shop around, because there’s quite a lot of variation in terms of rates, fees, LVRs, interest rate options, loan amounts and loan terms.”

Lenders that still offer SMSF home loans to new borrowers:

  1. AMP Bank
  2. Bank Australia
  3. Bank of Queensland
  4. Bendigo Bank
  5. Big Sky Building Society
  6. Commonwealth Bank
  7. Heritage Bank
  8. Hume Bank
  9. IMB Bank
  10. La Trobe Financial
  11. Liberty Financial
  12. LJ Hooker Home Loans
  13. Macquarie Bank
  14. Mortgage House
  15. Regional Australia Bank
  16. Resi
  17. Switzer Home Loans
  18. Yellow Brick Road

Lenders that no longer offer SMSF home loans to new borrowers (but still service existing borrowers):

  1. Bank of Melbourne
  2. BankSA
  3. Beyond Bank
  4. Homeloans
  5. NAB
  6. St.George Bank
  7. Westpac

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This article was reviewed by Research Director Sally Tindall before it was published as part of RateCity's Fact Check process.

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