SMSF loan solutions for free thinkers

Liberty SMSF loans FAQs

• What is an SMSF loan?

  An SMSF loan or Limited Recourse Borrowing Arrangement (LRBA) allows you to leverage the funds in your self-managed super fund (SMSF) to purchase an investment property. A growing number of Australians are taking control of their retirement planning and switching to SMSFs to help meet their property investment goals. Lenders such as Liberty offer SMSF home loan solutions and SMSF commercial property loans.

• How do SMSF loans work?

  SMSF loans support SMSF trustees to borrow money to purchase an investment property they may not have the funds to buy outright through their SMSF. Ownership of the purchased property is then held in a custodian trust until the loan is repaid. At that point, the SMSF acquires the title. Throughout the life of the loan, the SMSF members have a beneficial interest in the property. Any income generated is reinvested into the SMSF to help repay the loan or increase the fund value.

• How much can I get from an SMSF loan?

  The amount you can borrow with an SMSF loan will depend on your financial situation. You may need to maintain a minimum amount within your SMSF after the property purchase. This amount will vary depending on your individual circumstances.

• How do I apply for an SMSF loan?

  It's important to consider that loans for SMSF borrowers can be a little more complicated than your standard mortgage or commercial property loan. While the right SMSF property loan could help you take control of your future, investing in property in this way can be a complex strategy. SMSF loans have strict requirements under Australian superannuation law and normally require the establishment of a separate trust to hold the property. Before you can apply for a loan, you’ll need to have an existing SMSF structure, or be in the process of establishing an SMSF. If you’re new to SMSF lending, a Liberty Adviser can help to simplify the process and answer any questions you may have along the way.

• Can I refinance with an SMSF loan?

  Some borrowers will have taken out an SMSF loan when interest rates were higher, or their financial situation was different. In these cases, it is worth exploring refinancing your SMSF loan to see if there are better options to suit your individual needs. As a specialist lender, Liberty has the capacity and freedom to make loans that traditional banks cannot accommodate – including SMSF loan refinances. Ask us about refinancing with an SMSF loan today.

• Do I need an SMSF loan broker?

  If you have an SMSF and are considering taking out a mortgage to buy an investment property, you should first seek advice from your financial adviser or accountant. If you decide to go ahead, a mortgage broker can help you find the right SMSF loan for your needs and explore what other lending options may be available to you. And, if you’re new to SMSF lending, a broker can help to simplify the process and answer any questions along the way. To learn more, speak to a Liberty Adviser today.

• What is limited recourse borrowing?

  A limited recourse borrowing agreement (LRBA) allows you to diversify your assets which may increase your investment return and reduce risk. It helps to protect the other assets in your SMSF in the case of a default. While there are few lenders that offer loans to SMSF borrowers, limited recourse borrowing is available with Liberty’s residential SMSF loan.