More banks ditch their SMSF loans offering
Four different lenders have now confirmed they will exit the SMSF lending space in the past week, with a further two banks announcing they will no longer offer loans to SMSFs.
Westpac announced that effective 31 July 2018 it would no longer offer property loans to SMSFs for both residential and commercial properties.
This followed an earlier announcement from its subsidiary St.George that it, too, will withdraw its SMSF loan products from sale effective 31 July 2018.
Westpac Group confirmed to SMSF Adviser's sister title, Mortgage Business, that the removal of SMSF loans for both residential and business properties will be applied across all of the brands in the Westpac Group, including Bank of Melbourne and BankSA.
Commenting on the decision to withdraw all its brands from the SMSF lending space, Westpac stated that the bank “continually reviews its products to ensure we meet the expectations and requirements of [its] customers”.
“To streamline our product offering, effective Tuesday 31 July 2018 applications for new Consumer or Business Lending will no longer be accepted for SMSFs,” Westpac stated in a public release.
The borrowing market has been getting tougher for SMSF trustees for several months, especially with loan to value expectations, as foreshadowed by specialist brokers like Thrive Investment Finance's owner Samantha Bright last year.
Most recently, Ms Bright said off-the-plan purchases are becoming increasingly difficult to finance, with lenders either refusing applications for properties that are less than six months old or requiring stronger assets than normal to back their loans.
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 has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.