BMM removes clawback on SMSF line, updates offering

Among the changes to the line are:

• Up to 90 per cent LVR on residential.
• No risk fees or LMI up to 80 per cent LVR on residential.
• No minimum liquidity requirements or minimum balance in the SMSF required.
• Offset account available at no additional cost.
• Flexible policy including additional proposed super contributions considered.
• Simplified policy for refinances (lower documentation requirements for those whose repayments will be lower when refinanced).
• No clawback.

Rates have also been reduced, with BOLD SMSF Residential rates starting from 6.92 per cent (for those with a loan-to-value ratio of 60 per cent) and 7.42 per cent for BOLD SMSF Commercial.

Speaking to The Adviser about the changes, Murray Cowan, the managing director at BMM, said: “We are continuing to see an increased demand from brokers for SMSF loans both residential and commercial.

“To meet this demand, we have enhanced our BOLD SMSF range to deliver reduced rates and no clawback.”

According to Mr Cowan, increased interest from brokers for SMSF loans has come since the prudential regulator brought in new requirements for banks, which require them to hold more capital for SMSF loans (which means they are charging customers higher rates).

“The banks don’t seem to worry too much if the customers are going to leave them, which has been a good opportunity for our sector,” he said.

Mr Cowan added that the mortgage manager has also removed clawback on the BOLD SMSF line (which was previously 100 per cent for the first 12 months after settlement and 50 per cent for the six months after that) to provide an additional attraction to brokers.

“Put this all together and hopefully it’s a win-win all around; for brokers, for customers and for ourselves as well,” the BMM MD concluded.

“We’ve been educating brokers about SMSF as many didn’t realise you could refinance SMSF loans and now we’re seeing a lot more brokers working through their customer lists and saving them money on their rates.

“There are good savings to be made for customers – particularly if you think that the average term of an SMSF loan is seven years, rates have changed a lot since then. So, we can now refinance residential SMSF loans that might be on rates in the mid-to-high 8 per cent range, to under 7 per cent; and commercial SMSF loans from the low 9 per cent range to around 7.42 per cent.”

[Related: Pepper Money unveils SMSF loan offering]