Firstmac’s online direct-to-consumer brand Loans.com.au has launched an SMSF-only home loan for residential mortgages in a bid to buy into the rapidly growing sector.
The loan on offer includes a 4.99% (comparison rate 5.04%) SMSF-only product for residential investment property refinances and purchases, with an LVR of up to 80%.
While Firstmac owner, Kim Cannon, was overseas and unable to provide comment this morning, a Loans.com.au spokesperson says the group opted to make the move because they believe they can offer a competitive alternative to the major lenders who are, in the spokesperson’s words, ‘gouging’ prices on SMSF-only loans.
“[SMSF residential property loans] have been around for a few years now and they haven’t turned out to be the big risk that everyone thought they’d be, because most people are buying for their retirement - they’re not speculative. They’re not trying to buy a unit in Sydney and sell it within a year,” says the spokesperson.
“We looked at it and we had a couple of advantages over the banks in that we don’t have to put it across a commercial portfolio…we’ve got lenders mortgage insurance on each of these properties as well, which we pay the premium for.”
The spokesperson says that one major lender is currently offering an SMSF investment property loan at a variable rate of 5.98% (comparison rate 6.09%), plus an establishment fee of $1,500 and additional standing legal costs. Loans.com.au’s offering, on the other hand, will include fees of just $970.
There is some speculation that Firstmac might opt to offer the specialised loan via its broker channel in the near future, with the spokesperson admitting that it is a possibility.
“We have to see what sort of appetite there is for this loan…it’s still a niche industry. Don’t forget, also, that ASIC’s said they’re moving against financial advisers, accountants and brokers who get involved in trusts…So we’ll be waiting to see what they do.”