Loans.com.au has launched a 4.99 per cent SMSF home loan, saying it sees SMSF loans the same as “any other residential home loan”.
The 4.99 per cent rate is possible for the online lender because it treats SMSF loans the same as normal residential property loans, the company stated, with lender's mortgage insurance (LMI) paid by the lender.
"When they first came out, SMSF loans were a niche market and the banks considered them to be riskier and priced them as commercial loans,” managing director Marie Mortimer told SMSF Adviser.
“SMSF loans to us are just like any other property loan and there is opportunity there,” she added.
Ms Mortimer noted that when SMSF loans first emerged, their loan interest rates were approximately two per cent higher than the normal variable home loan interest rates.
“The gap has since narrowed to about 0.5 per cent, but with the cash rate at 2.5 per cent, it begs the question as to why SMSFs are still paying huge upfront and legal fees, plus interest rates around the six per cent mark to buy the same residential properties as Australian families,” she said.
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