SMSF Loan
- Thread starter Paul@PFI
- Start date
Never seen a SMSF loan with an offset attached. I know redraw is forbidden, but wasnt aware the banks were daring enough to attempt an offset?
As for 6%? Thats steep. The last two SMSF deals I was involved in were both sub 5%. One LVR at 70% (NAB), the other at 60% (Broker quoted - purchase didn't eventuate).
As for 6%? Thats steep. The last two SMSF deals I was involved in were both sub 5%. One LVR at 70% (NAB), the other at 60% (Broker quoted - purchase didn't eventuate).
Roughly mid/ April-June 2012 ( i would be wrong...)
SMSF loans really picked up in the last 2 years with more and more lenders coming on board.
Da Rock and AMP do them as well
Once you understand no cash out or no cross equity in SMSF you learn to love IO and offset.
most of the lower priced end of town is either fixed, r works around much yuk commercial process.
ta
rolf
Once you understand no cash out or no cross equity in SMSF you learn to love IO and offset.
most of the lower priced end of town is either fixed, r works around much yuk commercial process.
ta
rolf
Had an offset on st George smsf loan since 2010. There is a monthly charge with the offset account, but worth it in the interest savings
Hi Mick - La Trobe is a fantastic product - one is advocate, however the bigger issue with their product as compared to St George is there is no offset. Been working with LA Trobe since they introduced the product in Nov 13. Their commercial SMSF loan product is good too, been getting deals through at 5.99% which is great.
La Trobe is now 75% LVR and we have still been getting deals through at 5.6% however for 75% they will pushing up to 6.99%.
With the removal of the advice certificate for St George - it definitely makes St George a stand out product. Offset is worth it for 30 basis points given most SMSF have cash in the account sitting there. I don't advocate AMPs product and it is up around 6%.
Cheers, Ivan
Michael - So the client gets a choice. 5.5% no offset or 6% with offset. What a scam. I did the maths on a clients $375K loan and $25K offset and it explains that they really only save $375pa as they overpay $1875 in higher rates for an offset benefit of $1500.
What appears to be a 6% earn is really just 1.5%... Packer would lose his casino license doing that.
I will butt in............
25 k in offset isnt really the target market, or the vision.
50 to 100 k in offset now and or rapidly building into the future.
for those that want to pay the asset down a basic loan may be a better proposition.............but as is often the case peops change their minds
ta
rolf
Rolf, can you explain in a bit more detail what you mean? My specific situation (not implemented yet) is that I will park 100% of a IO loan amount in an offset against it - so no principal and no interest payments. Once the next property settles I will use a significant amount of the cash in that offset to fund it plus a second IO loan. I will then balance the cash in the fund over two offsets against 2 IO loans.
Income from the properties and concessional super contributions will be used to build up more $ in the offsets which I'm hoping can be used to fund further asset purchases or pay off the debt (this is undecided yet).
Am I on the right track with this thinking?
Comm SMSF or just normal Comm?
Normal comm with offset is "negotiable" lol and available with a few of the big 4
Rolf. I agree. But client strategy is to build that quickly by borrowing at a LVR that is cashflow +Ve so that contributions build. If the offset is used in two years for deposit on IP2 (if SMSF laws allow it) then I also question if client loan rate will then be excessive v's a offset with zero $ at that time.
Paul, can you clarify what you mean by "..if SMSF laws allow it"? Are you aware of specific situations where using cash that is offsetting a loan in a SMSF for funding another SMSF asset would breach the SiS act?
Depends on so many different things predominately LVR.
You can get 5.35%, no upfront fees, $14 monthly fee but you need to cover the valuation fee with a lender like St George but they will do max 65% LVR.
You can get a higher LVR but be prepared to pay higher interest rate and fees.
You can get 5.35%, no upfront fees, $14 monthly fee but you need to cover the valuation fee with a lender like St George but they will do max 65% LVR.
You can get a higher LVR but be prepared to pay higher interest rate and fees.
Like Shahin said - it depends, with commercial, with this loan amount it will put you in a favourable position.
Generally valuation fees are around $1300 at your expense.
LA Trobe offer 6.99% however may be 5 year loan term. I have done loans under 6% with Westpac and try with a application fee of less than $1k. NAB will depend on the scenario for sure but legal fees will be $2100 - and their legal team is a pain in the bottom - the worst of all banks.
St George are generally strong but I struggle with their turnaround. We have completed a significant volume with BOQ however their credit team is becoming extremely conservative much like Macquarie.
There are specialist lenders like Think Tank.
Cheers Ivan
.....and this is why I think St George is superior because at 5.35% and no app or upfront fees (other than the standard legal and val fees) its far superior to other lenders.
The only reason why you would use another lender would be for a higher LVR.
Ivan - not sure why you are experiencing long turnaround times but our experience with St George re turnaround times is extremely positive. They are in line with their resi SMSF stuff which is a few days for conditional/formal approval and 4-5 days to create and issue docs.
The only reason why you would use another lender would be for a higher LVR.
Ivan - not sure why you are experiencing long turnaround times but our experience with St George re turnaround times is extremely positive. They are in line with their resi SMSF stuff which is a few days for conditional/formal approval and 4-5 days to create and issue docs.
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