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Bank cuts rates on SMSF loans

by James Mitchell10 minute read
The Adviser

One non-major bank has announced it will be reducing its interest rate for SMSF loans by 15 basis points.

The AMP SuperEdge variable loan will be reduced by 15 basis points to 5.87 per cent per annum, an AMP spokesperson told The Adviser’s sister publication SMSF Adviser.

AMP also announced the AMP SuperEdge three-year fixed loan will drop by 82 basis points to 5.29 per cent per annum. The changes are effective from 18 January.

Speaking to SMSF Adviser, Thrive Investment Finance's director and mortgage broker Samantha Bright said SMSF loans are in most cases unlikely to see the types of offers being introduced for standard investment loans recently, with some lenders and banks having ceased SMSF lending entirely.


Ms Bright said while she hopes to see a loosening around SMSF loan policy as lenders “are within their APRA targets this year”, she believes lenders are reluctant to open up options for SMSF lending, or re-enter SMSF lending at all, because they are concerned about generating high loan volumes.

It is easier for lenders to gradually increase lending or “slowly open the gate” through making smaller adjustments to their standard investment loans, compared with changing their offers for SMSF loans, she said.

“If they open SMSFs, because the options are so few, you’re going to start channelling a higher volume and that’s where I believe they’re getting scared they’re going to hit their APRA targets.”

Ms Bright said the reluctance for banks and other lenders to make offers or discounts for SMSF loans could be related to the fact that under regulatory guidelines, they have to hold more capital aside for SMSF loans than for investment loans.

“It’s a drain on their capital and that’s why we’ll never see rates the same as standard investment loans,” she said.

[Related: AMP Bank returns to investor lending]



James Mitchell


James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.

He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.

He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.

James holds a BA (Hons) in English Literature and an MA in Journalism.



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