SMSF Investment Property Loan
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Use your SMSF to borrow to purchase residential investment property in Australia.
- Suitable for Australian residents with an established SMSF as well as those planning to establish a SMSF
- Loan amounts from $200,000 to $2,000,000, giving you the potential to acquire property worth more than your SMSF's available cash funds
- Use rental income to assist with repayments
- A limited recourse loan where the amount recoverable on default is limited to the secured property itself, and all other assets of your SMSF are protected
- Choice of repayment types - principal and interest, or interest only
- Flexible terms from 1 to 30 years (interest only - maximum 15 years)
- At the end of the interest only term, repayments automatically change to principal, interest and fees for the remainder of the contract term
- Rates - variable, fixed and combination loans (fixed and variable) available.
General advice: This information is general information only and does not constitute any recommendation or advice. The information is current at 29 March 2016, and is subject to change. It has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on the information, consider its appropriateness, having regard to your objectives, financial situation and needs. You should also consider obtaining personalised advice from a professional financial adviser and your accountant before making any financial decisions in relation to the matters discussed in this document.
How it works
- Your SMSF selects a residential investment property to purchase, then appoints a property trustee to purchase the property on its behalf.
- Your SMSF applies for the SMSF Investment Property Loan.
- The property trustee pays the deposit and exchanges contracts.
- If your loan is approved, at settlement the property trustee mortgages the property to Westpac and Westpac advances the loan.
- Your SMSF trustee pays all legal costs and stamp duty.
- Your SMSF collects rent, pays the usual outgoings on the property and makes the loan repayments. It manages the property in the same way as any other real estate investment.
- The property is held in trust for the SMSF by the property trustee and once the loan is repaid, the legal title may be transferred from the property trustee to the SMSF, or the property may be sold.
The rules around borrowing through an SMSF are quite complex so you should speak to your financial planner and professional tax adviser before deciding whether to borrow in order to invest within your SMSF.
What you'll need to apply
- Certified copy of SMSF Trust Deed
- Certified copy of Property Trust Deed
- Evidence of ability to service the loan (e.g. tax returns, rental estimates).
Please note: SMSF Investment Property Loans must be referred to a Westpac Panel Solicitor for review of the SMSF Trust Deed and the Property Trust Deed prior to settlement.
|Monthly Loan Maintenance Fee||Nil|
Additional standard legal costs will apply to cover the checking of the SMSF Trust Deed and Property Trust Deed, as well as the preparation of security documents.
Things you should know
- Other fees and charges apply.
SMSF Investment Property Loan Interest Rates
|Term||Annual interest rate||Comparison rate1|
|1 year fixed||5.21% p.a.||5.99% p.a.|
|2 year fixed||4.99% p.a.||5.87% p.a.|
|3 year fixed||5.09% p.a.||5.82% p.a.|
|4 year fixed||5.41% p.a.||5.87% p.a.|
|5 year fixed||5.41% p.a.||5.83% p.a.|
|6 year fixed||6.55% p.a.||6.37% p.a.|
|7 year fixed||7.05% p.a.||6.7% p.a.|
|9 year fixed||7.05% p.a.||6.82% p.a.|
|10 year fixed||7.05% p.a.||6.87% p.a.|
|12 year fixed||7.15% p.a.||7.04% p.a.|
Things you should know
- 1. The comparison rate is based on a loan of $150,000 over a 25 year term. WARNING: The comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.
- 2. Where a fixed rate applies, after the fixed rate period expires the interest rate will revert to the then current Variable Rate.
Commercial property inside a Self Managed Super Fund
Updated 1 June 2014