SMSF Refinance: Are you an SMSF mortgage prisoner?

Bernie Lewis Home Loans partner with new lenders who really want to refinance SMSF loans. See if you can get out of the SMSF mortgage prison with our help!

There are over 2.2 million Australians that own an investment property, and currently over 600,000 Self-Managed Super Funds (SMSF) which collectively invest in more than $40 billion in residential property. That’s a lot of property, and unfortunately for SMSF investors, they’re probably paying way too much for the luxury. An SMSF refinance has long been viewed as a tedious and expensive task, but with far cheaper rates on offer and our SMSF experts it should be on your to do list.

Due to the increased Reserve Bank Cash Rate, many SMSF loans that were previously established at a reasonable rate, are now significantly higher, a subsequently more expensive when compared to the new business market. Many lenders are reluctant to reduce the interest rate on an existing SMSF lending facility, and there is a stigma that SMSF loans are too difficult and too expensive to refinance elsewhere. This is turn creates the SMSF mortgage prison, whereby the SMSF is trapped in a product that is no longer reaping the desired rewards for the original investment strategy, especially when compared to lower rates obtainable for new business.

Bernie Lewis Home Loans partner with a few new lenders who really want SMSF business, and we’re looking at interest rates that are 300 basis points (3%) lower than the average existing SMSF loan would currently have. With the assistance of our specialist Mortgage Brokers, there could be thousands of dollars which can be saved and reinvested back into superannuation.

Why are SMSF loans difficult to refinance?

 SMSF lending can be thought of as a tedious and costly procedure. There are a number of factors which make the lending application a little different to a standard home loan, it is a little complex, but shouldn’t be difficult if handled by the right mortgage expert.

  • There are less lenders in the SMSF space than traditional residential investment lending
  • Fees associated in establishing or exiting from a SMSF loan
  • Most refinances are limited to just the dollar-for-dollar loan amounts
  • Specific documentation is required from an accountant to detail the SMSF
  • Security requirements including location and property type
  • Liquidity requirements i.e. liquid assets retained in the SMSF

What cost savings can be expected?

 It’s all dependent on the loan size, interest rate, establishment & exit fees involved with the scenario, but recently we have had great success in obtaining substantial net benefit, and quickly too.

Recently a Bernie Lewis Home Loans Mortgage Broker refinanced a $360,000 SMSF loan from 10.5% to 7%, which after fees and charges resulted in savings of $10,100 in the first year! These savings are reinvested back into the superfund, which can significantly improve the retirement position of the beneficiary over the coming years at the lower rate.

It must be acknowledged that every scenario is different, and a new interest rate on offer may vary depending on specific circumstances. With a Bernie Lewis Home Loans Mortgage Broker, you’ll partner with a skilled professional who can quickly identify where they can help you save. Call (08) 8300 8300 today, or simply fill out our contact form.


*The information provided in this article is general in nature and does not take into account your personal circumstances. Since everyone’s personal situation is different, this article should not be taken as advice.

SMSF Refinance Mortgage Prison