Firstmac has launched a residential self-managed superannuation fund (SMSF) loan product, with rates starting at 4.75 per cent.
Commenting on the product, managing director Kim Cannon said it is a "low-fee" product that would deliver a “streamlined” alternative to what he said is the “poorly serviced” market segment that had billions of dollars in property assets.
He added that the product, which includes both variable and fixed-rate options, has no application fees, annual or ongoing fees, settlement fees, and no legal fees for a refinance, while it requires “minimal supporting documents”.
The fees for the product includes a valuation fee, lenders legal fee for a property purchase, and a discharge fee, Firstmac told Mortgage Business.
The variable rate and five-year fixed rate for a purchase or refinance is 4.75 per cent per annum for an SMSF loan with a maximum loan-to-value ratio (LVR) of 70 per cent (comparison rate for both the variable and fixed rate is 4.78 per cent per annum for a purchase and 4.76 per cent per annum for refinance).
The variable rate and five-year fixed rate for a purchase or refinance is 4.99 per cent per annum for an SMSF loan with a maximum LVR of 80 per cent (comparison rate for both the variable and fixed rate is 5.02 per cent per annum for a purchase and 5.00 per cent per annum for refinance).
“We have chosen SMSF lending as the latest front in our battle to bring real competition to the market because we think we can deliver a much better product than anything currently on offer,” Mr Cannon said.
“The Firstmac SMSF suite is the perfect solution for customers looking to refinance for a more competitive offer or purchase a new residential property within an SMSF.
“We think that will make it a compelling proposition for brokers and their customers who don’t want to get bogged down in fees and red tape.”
Firstmac’s analysis of data from the Australian Taxation Office (ATO) has revealed that borrowers’ residential property holdings increased by 7.5 per cent to $39.1 billion in 2020, which it added was on the back of an 8.8 per cent jump in their total non-recourse borrowings to $50.23 billion.
Firstmac has written over 130,000 home loans and manages around $12 billion in mortgages and $300 million in cash investments.
The lender’s launch of an SMSF loan product has followed the recent announcement of the new Aspire residential SMSF product range by Better Mortgage Management.
The product range includes a 100 per cent offset account as well as loans of up to 80 per cent loan-to-value ratio (LVR), with rates starting from 4.84 per cent and risk fees ranging from 0 to 0.50 per cent.
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.