Westpac implemented a number of policy changes to its SMSF loans, effective from 26 June 2017, which include changes to the SMSF application process with trustees now required to provide a ‘Statutory declaration by SMSF trustee’ document which states that independent financial and legal advice have to be obtained before settlement.
Westpac also reduced the maximum interest-only repayment term from 10 years to five years, a policy adopted by St George, Bank of Melbourne and BankSA.
St George, Bank of Melbourne and BankSA also introduced a minimum SMSF fund balance of $200,000 which must be demonstrated upon applications.
The three subsidiaries also replaced the ‘SMSF Trustee Acknowledgement Form’ with the ‘SMSF Applications- Trustee Acknowledgment’.
“SMSF trustees will now be required to complete the ‘Statutory Declaration by SMSF Trustees’. This form must be returned with the loan offer documents and is a requirement to book settlement. This mandates the requirement for customers to seek independent financial and legal advice, when applying for an SMSF home loan,” St George Bank said in a communication.
St George Bank also reminded brokers and SMSF trustees of the reduced non-concessional caps that will apply from 1 July.
“The non-concessional contribution cap will reduce to $100,000 and max $300,000 over three years from $180,000 and max $540,000 over three years. This will be reflected in the Residential Policy Guide,” the bank said.