Redwood takes the headaches out of
SMSF loans

SMSF Loans

Self-managed superannuation funds (SMSF) provide the opportunity to take control of your super, providing the choice and flexibility allowing you to borrow to invest in direct real estate with SMSF Loans. Changes in superannuation laws have allowed SMSFs to borrow money to purchase residential or commercial property. This strategy has been popular with small business owners and now is attractive for mum and dad investors looking to enter the property market and secure their retirement future by investing in property. SMSF property is arguably the best tax incentive with a concessional tax rate of 15% in accumulation phase and no tax in pension phase

Advantages of SMSF loans to purchase property

• Insufficient funds in your SMSF to buy the property outright
• Reduce the cash flow commitment of your fund
• Borrowing can asset to diversify your SMSF Investment Portfolio
• tax deduction for loan repayments
• SAVE TAX – you can hold a property until pension age and pay no tax on capital growth

Why are SMSF Loans so appealing?

With many first home buyers priced out of the residential property, many investors are using their superannuation as an opportunity to enter Australia’s heated property market, with a buy now and hold strategy.

SMSF loans can benefit diversification by borrowing up to 80% of value of a residential property and 70% of the value of a commercial property (subject to serviceability and the banks criteria for SMSF lending). Remaining funds can be used to save $$$ or further diversify your investment portfolio.

How much can I borrow?

For SMSFs looking to purchase an investment property, most lenders will restrict your loan to:

• up to 80% of the property value for residential property
• up to 70% of the property value for commercial property

Product features will differ between lenders, a Redwood broker will assist you to choose the most suitable lender.

How does it work?

1. Contact Redwood to determine your borrowing power
2. SMSF invests in property, then appoints a property trustee to purchase the property on its behalf.
3. Your Redwood Broker will determine a SMSF Loan to meet your needs
4. Redwood has access to most SMSF lenders, we will choose the right loan for you.

SMSF Loans & Borrowing Checklist

Redwood Home Loans will guide you through the SMSF Loans process to reduce the chance of last minute surprises. After all – SMSFs are supposed to be fun. Our comprehensive checklist describes the steps taken to ensure a smooth SMSF Loan process. Read more

Best rates for SMSF Loans?

Redwood Home Loans have access to most SMSF lenders to recommend the best product to meet your needs. Remember it’s not just about the lowest rates, also the product features such as an offset account. So, before getting to the “winner”, let’s review the features and the fine print to suit your needs.

Case Study

For example, and this is a general example, let’s say an SMSF has $100,000 in savings and you would like to purchase a $350,000 SMSF property. Prior to purchasing SMSF property – contact a Redwood broker to obtain a pre-approval with a suitable lender (this does not include the SMSF balance or and SMSF financial product advice). Once pre-approved at 80% loan to value ratio (“LVR”) or $280,000 using a limited recourse loan. You will find a SMSF property and sign a contract of sale (obtain legal advice prior signing). The deposit of 10% or $35,000 is paid from your SMSF.

A valuation is conducted and the loan is then formally approved (subject to satisfactory valuation). Settlement is arranged and the costs to complete are paid from the SMSF including Stamp Duty, SMSF Loan application fees and legal fees. Remember SMSF Loans can be over a 30 year loan term (depending on the lenders criteria), during this time your property will hopefully appreciate and your rent will cover your repayments.

What Property Can I Buy?

You can buy a house to tenant or a commercial property for your business. There are certain rules and requirements which we can discuss with you. In many ways applying for a SMSF Loan is similar to a standard home loan however there are also many differences. If you’re unsure if a SMSF Loan is right for you call us on 1300 790 110 to discuss your options.

Want To Find Out How Much You Can Borrow In Your SMSF?

Complete Our Online SMSF Loan Application Form

Fund Name*
Enter the name of your SMSF or if not yet established enter "To Be Established"
Finance Type*
Select a finance type from the dropdown list
Off The Plan*
Select NO from the drop-down list if you are not purchasing property “off the plan"
Contact Details
Title*
Name*
First Name Family Name
Address*
Street Address Address Line 2 City State Postcode
Email*
Tel/Mobile*
Investment Security Property Details
Loan Amount*
Please note: the property size must be a minimum of 50 square meters!
Property Value*
Suburb/City*
Postcode*
Rental Income*
Enter annual actual or expected rental income from the property.
SMSF Details
Total Current SMSF Assets*
SMSF Trustee Type*
Select a SMSF type from the drop-down list.
Total Guarantee Superannuation (SG) Contributions:*
Enter total annual employer contributions for all members of the fund
Number of Members in the Fund*
Oldest Fund Member Age*
Note: if fund is not established please include current superannuation to be transferred to your SMSF. Superannuation contributions are generally calculated as 9.5% of your annual salary. If self employed please enter your actual contribution for the last financial year.
Privacy*
- By completing this form you agree that Redwood Home Loans Pty Ltd may collect and use your personal information as specified above
Phone
This field is for validation purposes and should be left unchanged.