⚡️⚡️⚡️
With energy prices rising, switch to a cheaper plan
💡
Compare Prices Now
⚡️⚡️⚡️

Refinancing an SMSF home loan

Refinancing an SMSF investment mortgage could save you a whole lot of money, but make sure you research your options before choosing the right loan for your financial situation.

We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!

You can buy an investment property through your self-managed super fund (SMSF). This requires an SMSF home loan. Like other home loans, you can refinance this loan if you want to switch to a better or more suitable product. But refinancing a SMSF home loan is trickier than an ordinary refinance.

There aren't many lenders now who lend to SMSF borrowers. And finding one that will accept refinancers is even harder. But it can be done. Keep in mind that when setting up a SMSF trust or making big changes (like refinancing) you should get professional advice from a tax agent or financial advisor.

Why refinance an SMSF home loan?

Refinancing an SMSF home loan
The main benefit of refinancing an SMSF home loan is the same as refinancing any other home loan — getting a more affordable deal. If your loan has a high interest rate attached and there are other similar loans available on the market offering lower rates, you could save thousands over the life of the loan by switching. Alternatively, you could switch to a loan that offers different and more flexible features.

How to refinance an SMSF home loan

SMSF loans work differently to most home loans. When applying for a new one, you will need to review all the eligibility requirements carefully and make sure the loan is suitable for your investment needs.

Some lenders may have additional criteria for refinancers as opposed to new SMSF borrowers. It's important to check this before completing a full application.

You will also need to gather a lot of paperwork to support your application. While specific paperwork differs by lender it generally includes:

  • Tax returns for the SMSF trust
  • SMSF Trust Deed
  • Custodian Trust Deed
  • Bank statements or audited financial statements

6 tips for refinancing an SMSF home loan

  1. Check the terms and conditions. You should always read the fine print closely when making an important financial decision, and SMSF loans regularly come with a wide range of terms and conditions attached. These conditions can include everything from the minimum required amount of funds held in the SMSF to details surrounding the purchase of the property, so make sure you’re familiar with these conditions before you decide to refinance.
  2. Don't forget the ATO requirements. According to ATO rules, refinancing the loan must not increase the amount you are borrowing against the property. The refinancing arrangement must be solely used to replace an earlier arrangement, and the trustee must not acquire legal ownership of the property while transferring to the new loan. It’s also worth noting that the loan cannot be used to ‘improve’ an asset, although repairs to a property are allowed. A range of other rules and restrictions apply to SMSF loans and all the technical jargon can get quite confusing, so seeking expert advice is recommended.
  3. Look at the loan's interest rate. The interest rate that applies to the amount you borrow has a huge impact on the total cost of the loan, so compare interest rates offered by a range of lenders. What is the average rate on the market today? How much money could you save on repayments if you were to refinance to a loan with a better rate? Consider whether switching from a variable to a fixed interest rate (or vice versa) could be beneficial.
  4. Factor in fees and charges. SMSF loans come with more fees than ordinary loans. Before switching, check what fees and charges apply to your current SMSF home loan and how do they compare to the charges on other loans? How much could you save in ongoing fees if you switched loans?
  5. Calculate switching costs. When considering the potential financial benefits of refinancing your SMSF loan, you need to weigh up those benefits against the cost involved in refinancing. For example, check if discharge or break fees apply if you switch to a new loan. You’ll also need to consider the cost of setting up the new financing arrangement, including application, establishment and legal fees. Calculate the cost of refinancing your SMSF home loan.
  6. Get help. Managing an SMSF investment strategy is a complex and involved process, so consider speaking to a specialist SMSF advisor. Getting professional advice tailored to your specific financial needs can be crucial to the success of your investments.

Setting up an SMSF home loan is a time-consuming process. SMSF loan applications take significantly longer to be processed than applications for ordinary home loans. There are several requirements that need to be met, such as choosing a custodian for the property. Refinancing may have many advantages for you, but the process takes time to complete.

You need to weigh up whether the time and effort to refinance the loan is worth it.

Compare SMSF home loans in the table below

Please note that very few lenders still offer SMSF home loans. A mortgage broker could help you find suitable products from specialist lenders.

1 - 4 of 4
$
years
Name Product Interest Rate (p.a.) Comp. Rate p.a. Fees Monthly Payment

Freedom Lend Variable SMSF IOInvestment≥ 30% Deposit

Freedom Lend Variable SMSF
4.19%
4.85%
  • App: $1,645
  • Ongoing: $395 p.a.
$734
A flexible SMSF home loan with interest-only repayments. 100% offset account attached.

Liberty Financial SMSF P&IIOInvestment≥ 40% Deposit

Liberty Financial SMSF
4.45%
4.89%
  • App: $495
  • Ongoing: $30 per month
$757
A self-managed super fund loan from Liberty Financial. Available with a 20% deposit.

Freedom Lend Variable SMSF IOInvestment≥ 35% Deposit

Freedom Lend Variable SMSF
4.09%
4.75%
  • App: $1,645
  • Ongoing: $395 p.a.
$725
Interest-only SMSF home loan with flexible repayments. Includes a 100% offset account.

Reduce Plus SMSF P&IIO≥ 40% Deposit

Reduce Plus SMSF
3.89%
4.41%
  • App: $570
  • Ongoing: $395 p.a.
$708
loading

Compare up to 4 providers

Aussie Home Loans Logo

Enter your details and get a free consultation with an expert broker from Aussie.

By submitting this form, you agree to the Finder Privacy and Cookies Policy and Terms of Use

Applications are subject to approval. Conditions, fees and charges apply. Please note that you need to be an Australian citizen or permanent resident to apply.

Credit services for Aussie Select, Aussie Activate and Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 (“Aussie”) and its appointed credit representatives, Australian Credit Licence 246786. Credit for Aussie Select products is provided by Residential Mortgage Group Pty Ltd ACN 152 378 133, Australian Credit Licence 414133 (“RMG”). RMG is a wholly-owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945. Credit for Aussie Activate products is provided by Pepper Finance Corporation Limited ACN 094 317 647 (“Pepper”). Pepper Group Limited ACN 094 317 665, Australian Credit Licence 286655 acts on behalf of Pepper. Credit services for Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 Australian Credit Licence 246786 (“Aussie”) and its appointed credit representatives. Aussie is a trade mark of AHL Investments Pty Ltd ABN 27 105 265 861. Credit and any applicable offset accounts for Aussie Elevate are issued by Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL / Australian Credit Licence 237879.

Aussie is a trade mark of AHL Investments Pty Ltd. Aussie is a subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124. ©2020 AHL Investments Pty Ltd ABN 27 105 265 861 Australian Credit Licence 246786.

By submitting this form, you agree to the Aussie privacy policy.

After entering your details a mortgage broker from Aussie will call you. They will discuss your situation and help you find a suitable loan.

  • A comparison of home loans from multiple lenders.
  • Expert guidance through the entire application process.
  • Free suburb and property reports.

Aussie Home Loans Lender Logos

The Adviser’s number 1 placed mortgage broker 8 years running (2013-2020)

Images: Shutterstock

More guides on Finder

Find the right home loan now

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.

2 Responses

  1. Default Gravatar
    carrieSeptember 16, 2017

    I have a unit purchased by super without loan,can I refinance this property ?

    • Default Gravatar
      MariaSeptember 17, 2017

      Hey Carrie,

      Thank you for reaching out to us.

      While it’s possible to refinance SMSF home loan, there are several factors to consider and this page is a guide on that.

      You may also want to consider getting professional advice that fits your financial situation that would aid you in your decision.

      Before applying, please ensure that you meet the eligibility criteria and requirements and to read the details, as well as the relevant Product Disclosure Statements/ Terms and Conditions of the option before making a decision and consider whether the product is right for you.

      Best,
      Maria

Go to site