Changes / tightening on servicing for investors

Discussion in 'Property Finance' started by Marty McDonald, 8th May, 2015.

  1. Rixter

    Rixter $uper Investor (Retired)

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    I think he's meaning the 15% cap compared to income outside a SMSF
     
  2. Peter_Tersteeg

    Peter_Tersteeg Finance broker/strategist

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    The same lending policies for individuals also apply to SMSF lending. An SMSF also needs to service the potential debt at an assessment rate, but the SMSF's income sources are a bit different from that of an individual.

    There's already significant restrictions on LVR for SMSF lending. Rates are already higher.

    I did see one proposal that SMSF should only be able to lend against established property (not brand new). Whilst I don't agree with this, it would shut down a lot of property sprukers overnight.
     
  3. lazibones

    lazibones Member

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    Yes but how is that a loop hole.
     
  4. JohnHenry

    JohnHenry Mister

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    Do you mean it requires 35% as deposit rahter than 20% as normal ?
     
  5. Rixter

    Rixter $uper Investor (Retired)

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    It's not..that's why I think that's what he is meaning.
     
  6. Peter_Tersteeg

    Peter_Tersteeg Finance broker/strategist

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    I mean you can only borrow a maximum of 80% in an SMSF, but in your own name you can potentially borrow 90% for investment purposes.

    I noticed in another thread you were told that SMSF lending is restricted to 65%. This might be true in the case of commercial property, but not for residential. Keep in mind however, that there are other restrictions in SMSF lending that mean you need more money in your SMSF than just the basic deposit. They don't want you to be putting all your eggs into a single investment so you will need more money available than just the deposit and purchase costs.
     
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