subscribe to our newsletter
APRA tipped to target SMSF loans

APRA tipped to target SMSF loans

The prudential regulator may soon inform lenders that they are not allowed to lend to SMSFs that fail to meet certain benchmark requirements with their fund’s balance, one SMSF specialist broker has warned.

While the latest raft of tightening by APRA – including a requirement for the banks to provide additional information to allow lending and mortgage risk to be more appropriately monitored – won’t impact the SMSF sector, the prudential regulator could look to target loans to low balance SMSFs next, according to Thrive Investment Finance owner Samantha Bright.

“There’s a recommendation, and it was actually by the ATO, that people with less than $200,000 in their fund [should] not get a loan, and we’ve seen some of the lenders then adopt rapidly the $200,000 as their minimum fund balance in line with that,” Ms Bright said.

However, there are still some lenders who have yet to adopt this recommendation in their lending criteria, and continue to lend to super funds with balances below $200,000.

Ms Bright said she would not be surprised if instead of being just a guideline and a recommendation, it became a hard benchmark.

“I think that’s probably one of the last frontiers that they could tighten around,” she said.

There is also a possibility that APRA could consider placing restrictions around new properties.

“Certainly if there is any dodgy activity going on, it is with new properties or off-the-plan, so if they were going to target something, that’s one area that they might look to target,” Ms Bright said.

[Related: APRA likely to 'tighten the screws' even further]

APRA tipped to target SMSF loans
mortgagebusiness

Latest News

The central bank has warned that an increase in the non-bank sector’s market share could pose a threat to financial stability. ...

The head of Australia’s largest bank has been forced to confront the devastating impact the group’s misconduct has had on the wellbeing ...

The Australian Prudential Regulation Authority has responded to the Hayne commission interim report by saying that a good banking system is ...

FROM THE WEB

podcast

LATEST PODCAST: Emotional intelligence and its role in managerial structure

Is enough being done to ensure responsible lending?