Non-bank lender offers 3-year fixed mortgage for SMSF
An Australian non-bank lender has stepped into the gap left by the big four with a limited time SMSF solution for three-year fixed mortgages at just 5.99 per cent.
Mortgage Ezy CEO Peter James said fixed rates in self-managed super funds have not been competitive in the past few years and had always been significantly higher than the variable rate.
“This offer is for a limited time only as rates continue to jump around, so it’s really a case of if someone is ready to borrow now they should take advantage of it,” he said.
“We are dictated to somewhat by the Reserve Bank and what it is going to do next, but until its board meets again next month, the offer will be available.”
Mr James said Mortgage Ezy had always been a strong advocate for SMSF lending.
“We believe it is a great aid for people to assist with their retirement and investment goals and we want to support people in these uncertain times of not knowing where interest rates are going to land.”
“This rate will also allow people to know where their commitments will land over the next three years. Interest rates have already risen three per dent over the past year and this creates uncertainty for people wanting to buy property.”
He said SMSF lending as whole is surging.
“While the rest of the market is holding back on lending we are seeing our volumes increasing each month,” he said.
“Although we were put in a holding pattern during COVID, the market started recovering in January 2021 and we have seen a 25 per cent increase in volume since then.”
He added the government’s promise to ban limited recourse borrowing has also created more certainty in the space.
“As a lender, we can only recover funds from the property – not from the fund – which is beneficial as far as risk management is concerned.”
“Up until the end of 2021, SMSF lending rose to $140 billion and if you look at why, the reason is that so many trustees are a little bit spooked by the stock market at the moment and rates offered by the money market have been impacted by inflation so property is a better option.
“People are still taking a conservative approach. The total amount of property in SMSF only accounts for 7.5 per cent of assets and 54 per cent of those properties are not tied to LRBA, so a lot of people are buying it in cash as well.
“The rate we are offering allows people to buy property if they do not have enough in cash to do outright. Rather than waiting they can secure property in their time frame.”
