Lenders will generally limit your SMSF loan to 70% loan to value ratio (LVR) of the property value for commercial SMSF loans, and up to 80% LVR of the property value in some cases for residential SMSF loans, or if you have stable and regular cash flow and you already have other assets. To determine how much you can borrow through an SMSF, you should consult a professional SMSF mortgage broker.
Standard home loans cannot be drawn from SMSF as law limits the lender from taking a recourse against the other assets when you default on the SMSF loan and the SMSF lender needs to sell the property. However, the SMSF lender cannot file any claims against your other trust assets because the SMSF loan is secured against the residential property.
The government regularly changes the rules around superannuation generally, and Self-Managed Super Funds in particular. In addition, banks and lenders are constantly changing SMSF lending policies so caution is advised and working with an experienced SMSF broker.
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