The SuperGear investment loan allows you to make purchases for new opportunities or to renovate existing SMSF investment properties.
Being able to purchase a property through your Self Managed Super Fund (SMSF) can add diversification to your investment strategy and give you more control over how you build your superannuation balance. Unfortunately because of the complex structures attached to SMSF home loans, not every lender offers them. The Commonwealth Bank is one such lender who offers a range of SMSF home loans so you can purchase property through your SMSF.
With a fixed rate available for one to five years of your loan, you have the chance to take control of your finances and make the most return on your investment property without having to worry about rate rises.
Things to consider about the CBA SuperGear Resi Fixed
If you are already a rental home owner through your SMSF, the SuperGear fixed loan can be used to refinance an existing loan, so long as it is SIS Act compliant. You can use the funding you receive to make necessary repairs or improvements on the property, or use it to help finance another investment—the choice is yours.
Features of the CBA SuperGear Resi Fixed
- Loan amount. The base amount for this fixed rate investment loan is .
- Loan term. For a residential property, the borrower can choose maximum terms up to years, although as mentioned fixed rates only range between one to five years. Commercial or rural investors cannot borrow any longer than 15 years.
- Loan-to-Value Ratio (LVR). The LVR differs just as the terms do. While residential investments can be financed for up to of the property value, a commercial property will only be considered for 65% of the value of the property. Rural investments are allowed to borrow 60% of the value of the property.
- Interest cover threshold. In order to qualify for the CBA SuperGear Resi Fixed, you must have available assets that could cover the cost of 125% of the yearly interest rate.
Fees you can avoid
- Annual fee. There are no annual fees associated with the SuperGear fixed loan.
- Early repayment adjustment. In the event that you were to default or pay off the SuperGear fixed during the fixed rate period, you would be subject to a $300 dollar charge in addition to the balance of what the bank was going to earn. This can be quite hefty so ensure you seek professional advice before leaving a fixed rate loan while the fixed term is still active.
Fees you can’t avoid
- Establishment fee. In order to help establish the pre-packaged SuperGear loan, you will be charged 0.80% of the loan amount, or if the loan is secured by a residence, no more than .
- Product fee. You will be charged a monthly $25 fee for the cost of the ongoing administration needed to maintain the SuperGear operating structure.
- Loan fee. For owners of residential properties there will be a $10 fee imposed each month to support the cost of administering the SuperGear loan.
How to apply for the CBA SuperGear Resi Fixed
If you would like to begin the application process for this loan, please speak to a qualified mortgage broker to start the process.
Here is the list of eligibility criteria that you must comply with in order to be eligible for this loan:
- Assets. There must be at least $200,000 in assets held by the SMSF before the bank can consider the application.
- SMSF Members. The members of the SMSF must all be in the accumulation phase, not the pension phase, when the loan begins.
- Interest cover threshold. There must be at least 125% of the annual interest payment held as cash or a fixed income.
- Trustee. There must be a corporate trustee in place as opposed to an individual one.
Here is the list of documents that must be submitted to proceed with the application process for this loan:
- Financial: The bank will want to see a detailed financial outline of your plans for the investment. In addition, they will ask for audited SMSF financial statements for the last three years, along with other relevant supporting financial information.
- SMSF trust: The bank will also need to approve your current SMSF deed to ensure that it’s authorised to borrow money.
The Commonwealth Bank’s fixed rate SuperGear Resi loan offers opportunities to update existing SMSF investments as well as purchase new ones. Add it to your comparison of SMSF home loans today.