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Use your BankSA Super Fund home loan to finance the purchase, repair and maintenance of your investment property.
The BankSA Super Fund home loan allows you to tap into your newly established or existing self-managed super fund (SMSF) to get financing to purchase new investment property. There are many benefits with such a loan, such as being entitled to negative gearing benefits and getting a limited recourse loan that protects the rest of the assets in your SMSF.
This type of loan can only be used towards the purchase of new investment property or for the repair or maintenance of residential property. The purchase of investment property will also need to be in alignment with your investment strategy and your SMSF Trust Deed has to have an express power to borrow.
Things to consider about the BankSA Super Fund home loan.
If you have an SMSF trust and are looking to purchase new residential property, a BankSA Super Fund home loan could be just what you need. Investing in property using this method is a long-term investment strategy with many benefits. For instance, you may be entitled to receive income tax benefits or qualify for negative gearing benefits on your SMSF loan. You can also use your rental income to help pay off the loan and are protected from losing all your assets in the fund in case of a default. In other words, the amount the bank can recover in case of a default is limited to the secured investment property.
Features of the BankSA Super Fund home loan
- Loan term and amount. You can choose a loan term of up to on a BankSA Super Fund home loan for principal and interest repayments, or a term of up to on interest-only repayments. The minimum amount you can borrow on this loan is and the maximum is .
- Loan to value ratio (LVR). Borrow up to of the property value on a BankSA Super Fund home loan if the trustee is an individual and up to 70% LVR if the trustee is a company.
- Interest offset facility. The BankSA Super Fund home loan allows you to offset your savings so as to save on interest charges. This works by linking your BankSA Super transaction account to your loan so that your savings and salary are used to offset your current loan balance, thus reducing what you pay in interest. The variable interest home loan offers a full offset interest while the fixed rate loan offers a partial interest offset.
- Repayments. This loan offers you flexible repayments on a weekly, monthly or fortnightly basis if you opt for principal and interest repayments and monthly repayments with interest-based repayments.
- Interest rates. You are charged a rate on a BankSA Super Fund Variable home loan. Interest on a fixed rate loan varies depending on the loan term, with rates ranging between 5.99% p.a. and 6.39% p.a.
- Rate lock. A rate lock is available with fixed interest rate loans. This allows you to secure the bank’s advertised rate for a period of 90 days before the home loan ends or the new fixed rate settles.
Fees you can avoid
- Break costs. You can make unlimited extra repayments on Super Fund Variable Rate Loans without incurring any break costs, while you can pay up to $10,000 annually on Super Fund Fixed Rate Loans without having to pay any penalties.
- Rate lock fee.If you opt for a fixed rate loan you can pay a rate lock fee to secure the advertised rate for 90 days. This safeguards you against rate changes in the time taken to lodge your application and have it processed. This fee is 0.15% of the loan amount or (whichever is greater).
Fees you can’t avoid
- Establishment fee. There is a establishment fee on this loan that goes into setting up the loan documents and account.
- Monthly administration fee. There is a $12 fee charged for the maintenance of the home loan ledger and for other services offered by the loan.
How to apply for the BankSA Super Fund home loan
Please note that you will be required to be an Australian resident who is over the age of 18 and provide the following documents with your application form:
- Certified copy of Trust Deed
- Bank statements showing evidence of member contributions
- Evidence of rental income
- Copy of existing lease / managing agent statement / real estate declaration
- If self-employed, provide business tax returns and financial statements
- If you have an existing fund, please provide the current SMSF tax returns and financial statements
Did you know that you can use your established SMSF account to access funding for the purchase of investment property? Learn more about the BankSA Super Fund home loan and similar loans from other lenders to find out how these lending products can help you invest through your SMSF today.