Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter
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.

Advertisement
Advertisement

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 corporate regulator has confirmed that responsible lending obligations are not a barrier to making variations from P&I to IO terms i...

The non-major has continued to recover lost ground in the home lending space. However, a rise in interest income has not been enough to prev...

Expectations of a “significant economic shock” in the first half of 2020 have prompted both Fitch Ratings and S&P to downgrade Austr...

FROM THE WEB

podcast

LATEST PODCAST: Managing the influx of COVID-19-related loans

Do you expect COVID-19 to reduce or increase your business flows?

Why we’ll keep delivering for our communities in the face of COVID-19

alex

As Australia tries to keep pace with a rapidly changing business and social landscape in the wake of COVID-19, Momentum Media is leading the way delivering essential content to our communities, writes Alex Whitlock, director of Mortgage Business.

Read more

Website Notifications

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