It’s farewell to the SMSF mortgage, thank goodness:
AMP is set to axe new residential and commercial lending for self-managed super funds, making the wealth giant the last of the major providers to withdraw from the controversial sector amid falling property values and rising regulatory concerns.
The nation’s largest financial conglomerate will also tighten controls on existing SMSF borrowers, such as by preventing switches from principal-and-interest loans to interest-only products.
The group’s new chairman and veteran banker, David Murray, has been a long-term critic of leveraging superannuation and the move was expected after CBA, the nation’s largest lender, pulled back from lending earlier this month.
This follows CBA and WBC:
A second major lender has decided to remove SMSFlending from its services.
Commonwealth Bank of Australia (CBA) has said it is “streamlining” its product offering and as such will no longer offer the ability for self-managed super fund (SMSF) trusts purchase investment property with their fund.
In July, Westpac announced it would be removing its SMSF product. CBA also announced it would be removing low-doc loan products.
CBA’s SuperGear product currently available will cease at close of business on 12 October. New applications and refinancing applications will not be accepted after this date.
Any approvals before 12 October have the condition they must be settled and approved by 28 December 2018.
A CBA spokesperson said in a statement, “As part of our strategy to become a simpler, better bank, we are streamlining our product portfolio and have made the decision to discontinue our ‘SuperGear’ lending product which enabled investment in residential and commercial property through self-managed super funds.
“This change will be effective from close of business on 12 October 2018. We will continue to support our existing customers who have these loans with us.”
It’s gone under Labor anyway but it won’t property prices at the margin According to the ATO, as at June 2017, SMSFs have borrowed a total of $28.6 billion using limited-recourse borrowing arrangements, roughly 11% of total mortgage flow, but halve that given 50% goes into commercial.
