Powered by MOMENTUM MEDIA
subscribe to our newsletter

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.

Advertisement
Advertisement

“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

PROMOTED CONTENT


>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

A foreign bank has had its Australian banking licence revoked by APRA after it pulled out of the Australian market. ...

The average number of days properties spend on the realestate.com.au site fell to a record low in May, with records broken in many states a...

The big four bank has hired the former boss of AUSTRAC as the regulator has launched an investigation against NAB for potential anti-money...

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.