SMSF Loans and Mortgage Brokers

SMSF Investment Property

A popular magazine for the mortgage broking industry, The Adviser, recently ran a story about SMSF borrowing specifically targeted at its mortgage broker readers.

The story included a section titled “SMSFs – what mortgage brokers should know”.  Well if it’s important enough for mortgage brokers to know about, then we figure it’s important enough for you to know about to.

Many SMSF holders will already be aware of these facts, but they still make for interesting reading.

  • SMSF loans were made possible thanks to the introduction of limited recourse borrowing rules in 2007
  • An SMSF may borrow up to 70% of a property’s value
  • SMSFs make up the highest proportion of superannuation savings in Australia
  • 38% of mortgage brokers have written an SMSF loan (according to a poll of the magazine’s readers)
  • SMSF loan products give mortgage brokers another area to diversify into
  • ATO figures show that the average age of new SMSF members is reducing
  • 11% of new SMSF members in the June 2010 quarter were aged under 35
  • A number of lenders are offering SMSF loans are standard variable rates
  • Mortgage brokers need to be careful of not overstepping the line on providing SMSF advice
  • There are 454,465 SMSFs in operation as of the September 2011 quarter
  • 25,000 new SMSFs are established each financial year, net of those winding up
  • The total dollar value of all SMSFs as of the September 2011 quarter was just under $400 billion
  • Total SMSF assets grew by 122% during the five years to 2010, compared to growth of 60% in the non-SMSF sector

The idea of borrowing in your self managed super fund to purchase property can be very attractive, especially for business owners looking to purchase their own premises without tying up their business capital.

It certainly seems that more and more mortgage brokers are jumping onto the SMSF loan bandwagon, so for any SMSF member looking for a loan there should be plenty of options in terms of finding the right help and advice.

For more information on SMSF loans please speak with your financial adviser or other SMSF professional.  Or even your mortgage broker it now seems.

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