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Major bank scraps all SMSF loans
Westpac confirmed it is scrapping all SMSF loans, after announcing last week its subsidiary St George would exit the market.
In an online update, Westpac has announced that effective 31 July 2018 its SMSF Investment Property Loan will be removed from sale.
Business lending to an SMSF for residential and commercial securities will also no longer be permitted, Westpac stated.
Westpac confirmed it will continue to service its customers with existing SMSF loans as allowable under the credit policy including split loans, switching loan products and extending loan maturity.
Effective Tuesday 31 July 2018, the bank said it will no longer permit switching from principal & interest to interest only and extending an interest only term.
Westpac also stated that under an internal pipeline policy, credit approval of in-flight deals as at Tuesday 31 July 2018 will be allowed up to Tuesday 30 October 2018 where signed customer application forms are held and dated prior to Tuesday 31 July 2018 and customer sales conversation has been recorded in internal systems prior to Tuesday 31 July 2018.
This latest move follows the announcement by its subsidiary St.George last week that it too will be withdrawing from sale its SMSF Home Loan product and Business Lending to SMSFs, effective Tuesday 31 July 2018.
Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
CBA still willing able and open for business folks!!0- Super & property are like a match made in heaven, in my opinion. Both long-term investments, allow members to increase the gross assets of their fund, allowing for higher levels of compounded growth over time. Not an option for all people but matched with sufficient liquidity, sensible gearing levels & enough insurance to cater for those Plan B moments, what's not to like?
Contrast SMSF lending at LVRs of no more than 70% with LVRs on first home buyers of up to 95% and tell me which is the riskier market....0 - With that logic, people also shouldn’t invest in term deposits which don’t cover inflationary costs or minimum pension obligations. If you do your research and make an informed choice, then invest away. Maybe people should buy shares in dick smith or s&g instead. Skewing the investment choices does not cure bad choices, nothing will. As long as the regulators show a back bone with shoddy advice, then who cares what people invest in if it gives them a chance at self funded(ie no govt support) retirement?0
- The returns they make do not warrant keeping the product available. Largely due to the capital requirements set out by the RBA for every dollar lend via smsf LRBA’s is my guess.0
- this is ridiculous most of the investment lending is super managed funds if they go through with this it will hurt the market even more at a time like this bloody stupid.0
- It is unethical lending. People shouldn't be able to invest super into investments that are highly likely to produce negative returns. The rent will not cover interest and the capitals gain arguments are dubious.0
- In my experience, the rent not only covers the interest, but also the principle and the other costs thereby producing positive returns for members. The maximum LVR allowed for SMSF lenders is much lower than an individual.0
- why?0
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