Refinance a Self Managed Super Fund loan to a lower interest rate.

Refinance a SMSF Loan

How Can You Refinance a Self-Managed Super Fund (SMSF) Loan?

Unleash Investment Growth: Refinancing Possibilities for Your Self-Managed Super Fund Loan

Unlock the potential of your Self-Managed Super Fund (SMSF) with strategic refinancing.

Refinancing an SMSF loan can be a powerful tool to optimise your investment security growth and accelerate your retirement goals. While there are some additional considerations compared to a traditional home loan, navigating the process can be smooth with the right guidance.

Here’s how refinancing your SMSF loan can empower your investment strategy:

  • Secure lower interest rates: Reduce your ongoing loan repayments, freeing up valuable funds to consolidate SMSF investments or pursue new growth opportunities.
  • Eliminating ongoing fees: Escape the burden of unnecessary fees by refinancing to a loan with a more transparent structure. This can translate to significant cost savings over the long term, boosting your SMSF’s overall performance.
  • Unlock equity potential: If your investment property has increased in value, refinancing can help you access this equity value to decrease your interest rate to pay down your SMSF loan sooner.


Remember, refinancing should be a strategic decision that enhances your SMSF’s long-term growth. We’ll work closely with you to ensure the chosen refinance option delivers a clear financial benefit to your self-managed fund.

Which SMSF Types are Acceptable for a Refinance?

Generally, most compliant Self-Managed Superannuation Funds (SMSFs) are eligible for refinancing as long as the applicant is a Corporate Trustee.

Here’s what you need to know:

  • Complying SMSF Structure: Your SMSF must comply with all relevant Superannuation Industry (Supervision) Act (SISA) regulations. This typically involves having a trustee structure where the members hold a beneficial interest in the property and have the legal right to acquire it and the SMSF is the beneficial owner of property.
  • Two Common SMSF Structures:
    • Single Member SMSF with a Corporate Trustee: This structure is common for individual investors. The SMSF is the beneficial owner of the property, while a separate trustee company (with the member(s) as directors) holds legal ownership.
    • Multiple Member SMSF with a Corporate Trustee: Similar to the single member structure, a separate company acts as the legal owner (different from the SMSF trustee company) while the SMSF itself holds beneficial ownership. Here, the SMSF must have between one and five members, with one member acting as the sole director of the property trustee company.

Therefore depending on your SMSF structure the SMSF must have one member and fewer than five members.

Refinance a Self Managed Super Fund loan to a lower interest rate.

A Golden Rule!

A SMSF refinancing should offer a tangible beneficial advantage to your existing SMSF loan.

Can Lowering My Loan-to-Value Ratio (LVR) Help Me Secure a Better Interest Rate on My SMSF Loan?

The Loan-to-Value Ratio (LVR) is a critical factor lenders consider when setting interest rates for SMSF loans. It simply compares your loan amount to the current value of the property securing the loan. A lower LVR signifies less risk for the lender, and is typically rewarded with a more favorable interest rate.

Here’s how LVR affects your SMSF loan interest rate:

  • Lower LVR (ideally below 60%) typically translates to lower interest rates. This is because the property value provides a larger buffer for the lender in case of unforeseen circumstances.
  • Higher LVR (typically above 80%) often results in higher interest rates. With a smaller buffer between the loan amount and property value, lenders may perceive a greater risk, leading to a higher interest rate.

So, how can you leverage this to your advantage?

If you’ve owned your SMSF investment property for more than a year and property values have increased, your LVR might have improved significantly. This presents a perfect opportunity to explore refinancing your SMSF loan.

Refinancing with a lower LVR can lead to:

  • Reduced interest rates: This translates to significant savings on your ongoing loan repayments, freeing up valuable capital to reinvest within your SMSF and accelerate your retirement goals.
  • Improved cash flow: Streamline your finances by potentially lowering your overall interest payments.

Streamlining Your SMSF Refinance: Required Documents and Eligibility.

To refinance a SMSF loan can be a smooth process, especially if you meet certain lenders criteria. Here’s what you’ll need to provide for a streamlined refinance:

Standard Documentation: In addition to complying with your lender’s SMSF policy, you’ll need to submit essential documents like your SMSF Trust Deed and Custodian Trust Deed.

Eligibility for Streamlined Refinance: To qualify for a streamlined refinance process, your SMSF must meet some key conditions:

  • Clean Credit History: The credit report for the borrower(s), guarantors (if applicable), and any associated entities should be free of significant negative marks.
  • Established Loan History: Your existing SMSF loan must have been in place for at least 12 months with a consistent record of on-time repayments.
  • Stable Rental Property: The property securing your SMSF loan should be currently tenanted and have a minimum occupancy rate of 9 out of the past 12 months.
  • Favorable Loan-to-Value Ratio (LVR): The LVR (loan amount compared to property value) needs to be 80% or lower.
  • Verifiable Rental Income: For well-established SMSF refinances, you’ll need to provide at least 12 months of bank statements demonstrating rental income, along with a current rental statement or lease agreement. This documentation helps verify the property’s rental performance.
  • Demonstrable Benefit: The refinancing process should offer a clear beneficial advantage to your SMSF. Ideally, this translates to a lower interest rate and a reduction in your monthly principal and interest (P&I) repayments compared to your current loan.

If you’re unsure whether your SMSF meets these criteria, don’t hesitate to contact Neomoney. Our team can assess your specific situation and guide you through the process to determine if refinancing is the right option for your SMSF investment strategy.

What SMSF Security Types are Acceptable?

Whether your SMSF is purchasing a SMSF or refinancing, the security or title must have a zoning and town planning classification of Residential, Rural Residential, Rural Living, or an equivalent type where residential use is a permitted use. This can include options such as single dwellings, duplexes, townhouses, or high-density residential securities (subject to limitations) such as:

  • Units
  • Villa
  • Apartments
  • Townhouses
  • Residential Houses,
  • High Density Securities. (A maximum of 4 or a 25% share held in the complex, whichever is the lowest)

With Acceptable Titles as the Following:

  • Strata Title
  • Torrens Title
  • Freehold Land
  • Common Law Title
  • Community Title (if the development has been fully completed)
  • Crown leasehold land in the ACT (with a lease term at least 5 years longer than the loan term).

Don’t let a high-interest rate or fragmented investments hold back your SMSF’s growth potential. Explore the possibilities of refinancing today, ask us How!

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