Broker guide
SMSF Loan Requirements for Mortgage Brokers
An SMSF property loan requires the right borrowing structure, contributions, liquidity and lender documents before you present the fund’s application.
- Published
- Updated
An SMSF loan is a limited recourse borrowing arrangement (LRBA) that lets the trustee of a self-managed super fund (SMSF) borrow to buy one asset. A separate holding trustee holds that asset until the loan is repaid, and a lender whose loan defaults can claim only that asset.
Since 10 August 2026, a fund can’t use a new SMSF loan to buy residential property, because a new LRBA can finance real property only if it’s business real property. For a residential property, a broker can still arrange two loans: a refinance of an existing arrangement, or a purchase whose contract was exchanged before that date.
For either loan, the lender assesses the borrowing structure, the rent and contributions that meet repayments, the fund’s liquid assets and its documents. Whether the fund should borrow at all is a decision for its trustees and licensed adviser, and this guide covers the broker’s credit assessment.
Establish the Borrowing Structure
Establish the structure first, because an SMSF loan separates the borrower, the legal owner and the fund that benefits from the property. A residential application also depends on when the fund signed its purchase contract or entered its existing loan.
How an SMSF Loan Differs From a Personal Mortgage
With a personal mortgage, the member borrows, owns the home and repays from their own income. With an SMSF loan, the fund trustee borrows, a holding trustee holds legal title and the fund repays from its own money.
The Australian Taxation Office (ATO) guide to LRBAs sets out how the arrangement works. The fund holds the beneficial interest in the asset, receives its income and has the right to take legal ownership once the loan is repaid. The fund’s other assets stay protected if the loan defaults.
That limited recourse changes the lender’s repayment assessment. The lender counts the fund’s rent and super contributions, and it can ask the members to guarantee the loan personally. Superannuation mortgage loans of this kind are investment loans only, so no member or relative can live in the property.
The 10 August 2026 Residential Property Change
The ATO published its guidance on the LRBA changes on 28 July 2026. An LRBA entered on or after 10 August 2026 can buy real property only if it’s business real property. That means land and buildings used wholly and exclusively in a business.
The change applies whether the lender is a bank, a non-bank or a related party. LRBAs themselves aren’t banned, and the change leaves residential property already in an LRBA alone. The ATO lists the arrangements the change doesn’t touch.
- Real property already financed under an LRBA entered before 10 August 2026, including when the fund maintains or refinances that loan.
- A purchase under a binding contract exchanged before 10 August 2026, even if the loan is entered or the purchase settles later.
A fund can still buy residential property that isn’t business real property with its own money, but it can’t finance that purchase under an LRBA. This guide describes the rules in force on its publication date.
The Four Parties in a Limited Recourse Loan
Name each party before you collect documents, because the loan agreement, title and guarantees each sit with a different one. The table uses a fictional fund.
| Party | In the fictional fund | Role in the loan |
|---|---|---|
| Fund trustee | Kestrel Super Pty Ltd as trustee for the Kestrel Family Super Fund | Signs the loan agreement as borrower and makes the repayments from fund money |
| Holding trustee | Kestrel Property Pty Ltd | Holds legal title on trust for the fund until the loan is repaid and grants the mortgage |
| Borrower | The fund trustee | Owes the debt, with the lender’s recourse limited to the property |
| Property owner | Legal title with the holding trustee, beneficial interest with the fund | The fund receives the rent and can take legal title after the final repayment |
| Guarantors | The two members, in their personal capacity | Sign personal guarantees when the lender requires them |
The holding trust is often called a bare trust. The ATO says super law doesn’t specify the type of trust. A discretionary trust can’t hold the asset, and neither can a unit trust in which the fund is one of several unit holders.
A common question is how to transfer property to the SMSF after the loan is repaid. The ATO’s rules on assets under an LRBA let the fund take legal ownership from the holding trust at that point without breaching super law. The transfer itself follows the trust documents and state or territory property law, so the fund’s lawyer handles it.
Purchases and Uses That Need Specialist Advice
Refer these purchases and proposed uses to the fund’s adviser or lawyer before you approach a lender. Each one raises a super law question that a credit assessment can’t answer.
- A residential contract exchanged on or after 10 August 2026. The fund can’t finance that property under an LRBA unless it’s business real property.
- A contract exchanged before 10 August 2026 that the parties later change. The ATO says a change that removes the contract’s fundamental terms can start a new arrangement.
- A purchase from a member or relative. A fund generally can’t buy residential property from a related party, because the exceptions cover assets such as listed securities and business real property.
- A member, relative or other related party who wants to live in, holiday in or rent the property. Personal use breaches the sole purpose test, and a lease to a related party makes the fund’s interest an in-house asset.
- A property with a business use, or a farm with a home on it. Whether it’s business real property is a legal question, and the guide to SMSF commercial property loans covers business premises.
- More than one title, vacant land to build on or planned renovations. Borrowed money must buy a single asset and can’t improve it.
A Fictional Purchase From Structure to Repayment
This example follows one fictional fund from its trust structure to the lender’s repayment test. The fund’s eligibility and the lender’s credit decision are separate tests with separate owners.
The Kestrel Family Super Fund exchanged contracts on a $600,000 residential unit on 31 July 2026, before the change. Settlement is due on 30 October 2026. The fund holds $560,000 in cash and listed shares, and it has two members earning salaries of $120,000 and $95,000.
The fund’s adviser and lawyer confirm eligibility first.
- The contract date shows the purchase is protected from the 10 August 2026 change.
- The fund’s trust deed allows borrowing, and its investment strategy covers a geared residential property.
- The seller and the tenant are unrelated to the members.
- The holding trust exists before settlement, and the contract names the right purchaser.
The lender then makes its credit decision, and Bluestone is one lender that still accepts these purchases. Its SMSF loan page, as at October 2026, lists a corporate trustee and minimum net assets of $200,000 before the purchase. Bluestone’s page caps residential SMSF loans at 80% of the property value and $1.5 million.
- The fund borrows $390,000, a loan-to-value ratio (LVR) of 65%.
- The fund pays the $210,000 balance of the price and $27,000 in assumed stamp duty and legal costs, which leaves $323,000 in liquid assets.
- The unit rents for $600 a week to an unrelated tenant, and the lender counts 80% of that rent.
- Employer contributions for both members flow into the fund after contributions tax.
- The lender tests whether that income covers the fund’s running costs and the loan repayments at its assessment rate.
The next section reconciles those figures. A fund that passes the credit test but fails an eligibility test can’t proceed. The same applies to a fund that meets super law but fails the lender’s test.
Demonstrate Repayment Capacity
Demonstrate repayment capacity from the fund’s own cash flow. The lender counts shaded rent and regular contributions, deducts the fund’s commitments and checks liquid assets last.
This illustrative lender assessment uses the fictional Kestrel fund. The assessment rate and fund running costs are assumptions, and the contributions are shown after the 15% tax a fund pays on concessional contributions.
| Item | Annual amount | Basis |
|---|---|---|
| Gross rent | $31,200 | $600 a week from an unrelated tenant |
| Rent counted | $24,960 | 80% of gross rent |
| Employer contributions counted | $21,930 | 12% super guarantee on $215,000 of combined salaries, less 15% contributions tax |
| Assessed income | $46,890 | Rent counted plus contributions counted |
| Less fund running costs | $4,000 | Assumed accounting, audit and ATO levy |
| Less loan repayments | $39,352 | $390,000 over 30 years, principal and interest, at an assumed 9.5% assessment rate |
| Surplus | $3,538 | Assessed income less running costs and repayments |
| Liquid assets after settlement | $323,000 | Cash and listed shares left after the purchase |
The fund has no other borrowing, so the loan repayments are its only existing commitment. A fund with an earlier LRBA over another asset would deduct those repayments too.
The super guarantee rate is 12% for 2026–27 on the ATO’s super guarantee table. The members’ employer contributions of $14,400 and $11,400 sit inside the $32,500 concessional contributions cap for 2026–27. Contributions above that cap can mean extra tax.
How Lenders Count Rent and Contributions
Each lender sets its own shading, so the 80% rent figure in the example matches only some policies. Firstmac’s 10 September 2026 product sheet counts 80% of gross rent and 100% of contributions. It also counts after-tax voluntary contributions where they’re consistent, and it says all servicing must come from the fund.
La Trobe Financial’s residential SMSF loan page, as at October 2026, verifies 80% of rental income and an SMSF contribution statement. Pepper Money’s SMSF loan page, as at October 2026, considers non-concessional contributions against the fund’s recurring income. Bluestone counts proposed contributions alongside current ones.
Liquid Assets After Settlement
The fund’s $323,000 in liquid assets covers about eight years of repayments at the assessment rate. That buffer carries the fund through vacancies and rate rises, and it also pays member benefits and fund expenses.
If the unit sits empty for six weeks, the rent counted falls by $2,880 and the surplus drops to $658.
Liquidity tests differ between lenders. Firstmac’s sheet sets a 5% liquidity benchmark. Pepper Money doesn’t require a liquidity test, and neither does Bluestone on its page as at October 2026.
Prepare the Fund Documents
Have the fund documents ready before you approach a lender, because the credit decision rests on the deeds, the fund’s financial position, the members and the contract. AMP’s SMSF supporting documents checklist, as at October 2026, is a typical list.
- Certified copies of the SMSF trust deed, which must allow the fund to borrow, and the holding or bare trust deed.
- Company documents for the corporate trustee.
- The fund’s investment strategy, on the lender’s template where it has one.
- The most recent SMSF tax return showing net assets, plus the latest member statements.
- A recent bank or shareholding statement when the tax return doesn’t show the lender’s minimum net assets.
- Identification for each member and a statement of position from each personal guarantor.
- Income evidence for each guarantor, such as payslips or tax returns.
- The contract of sale, showing the exchange date and the holding trustee as purchaser.
- A lease, rental statement or rental appraisal for the property.
For a refinance, AMP also asks for the most recent six consecutive months of statements for the loan being refinanced. Refinance costs above $10,000 in the new loan need invoices or payout letters. Collect the full statement period the chosen lender lists.
The guarantees complete the file. AMP asks for a personal guarantee from the directors of the company trustee, and Firstmac’s 10 September 2026 product sheet asks for personal guarantees from the fund’s members.
Which Lenders Offer Residential SMSF Loans Now
Among the SMSF loan providers below, Bluestone is the only one whose page lists residential purchases, and only for contracts exchanged before 10 August 2026. The table dates each lender’s residential offer by the page it comes from.
| Lender | Residential SMSF lending | Source date |
|---|---|---|
| AMP | Refinances, with a documents checklist written for refinance applications | As at October 2026 |
| Bluestone | Purchases with a contract exchanged before 10 August 2026, and refinances of existing LRBAs | As at October 2026 |
| Firstmac | Refinances only | 10 September 2026 product sheet |
| La Trobe Financial | Refinances of existing residential SMSF loans | As at October 2026 |
| Liberty | Residential SMSF loans listed under refinancing | Effective 1 October 2026 |
| Pepper Money | Refinances of existing residential SMSF loans, with purchases limited to business real property | As at October 2026 |
| NAB | No residential property loan on its SMSF page, which lists NAB Super Lever for shares and managed funds | As at October 2026 |
| BOQ Specialist | An SMSF page for practice premises, which is commercial lending | As at October 2026 |
The Liberty SMSF loans guide covers Liberty’s criteria and broker process. For business premises, use the SMSF commercial property guide.
Search results for a NAB SMSF loan can include historical products. NAB’s SMSF page, as at October 2026, lists NAB Super Lever, a margin loan and LRBA for buying shares or managed funds, and no residential property loan. Treat any lender as a provider only when its current product page or broker policy lists the loan you need.
Compare Lender Conditions
Residential SMSF home loan lenders differ most on maximum LVR, the fund’s net assets and liquidity, the property they accept and the income they count. No single LVR or net asset test applies across lenders.
| Lender | Maximum LVR and loan | Fund tests | Property limits |
|---|---|---|---|
| AMP (as at October 2026) | Up to 80% depending on location zone, up to $2.5 million | $250,000 net assets, corporate trustee only, liquidity test, directors’ guarantees | Residential investment only, with no off-the-plan, rural or commercial security |
| Bluestone (as at October 2026) | 80%, up to $1.5 million | $200,000 net assets before the purchase or refinance, corporate trustee, no minimum liquidity | Residential purchases need a contract exchanged before 10 August 2026, and rural residential is accepted up to 2 hectares |
| Firstmac (10 September 2026) | 60%, 70% or 80% tiers, up to $2 million, or $1.5 million at 80% | 5% liquidity benchmark, corporate holding trustee, members’ guarantees | Residential only, with no vacant land or multiple dwellings on one title |
| La Trobe Financial (as at October 2026) | 80%, up to $5 million | Refinances only, verified with an SMSF contribution statement | Residential security |
| Liberty (effective 1 October 2026) | Up to 90%, up to $10 million | An SMSF review fee applies to an existing fund | Residential security |
| Pepper Money (as at October 2026) | 90% for residential refinances, up to $3 million | $150,000 net assets, corporate trustee, no liquidity test | Refinances of existing residential SMSF loans only |
On a protected purchase, the deposit is the share of the price the loan doesn’t cover, plus purchase costs. At Bluestone’s 80% maximum, the fund pays at least 20% of the price from its own money. The ATO lets borrowed money also pay acquisition costs such as stamp duty, but the lender’s LVR limit still caps the total loan.
La Trobe Financial’s SMSF Express Refi needs no serviceability calculator when the fund shows strong repayment conduct and the new loan improves its repayment position. For a broker looking for a low doc SMSF loan, that’s the nearest equivalent among these lenders.
Bulma’s Policy Advisor answers SMSF lending questions across its 52+ covered lenders, quoting the policy wording behind each answer. A side-by-side comparison also names the covered lenders whose policy doesn’t address the point, which a broker can keep in the file notes.
Resolve a Recurring Cash-Flow Shortfall
A shortfall in recurring cash flow is resolved either by a record that proves income the lender hasn’t counted, or by a change to the arrangement. Tell those apart before submission, because a record takes days while a restructure needs the fund’s adviser.
In a variation of the fictional example, the second member drops to a $50,000 part-time salary. Their employer contributions after tax fall from $9,690 to $5,100, which turns the $3,538 surplus into a $1,052 shortfall.
The first member has made after-tax contributions of $8,000 a year for three years. These non-concessional contributions aren’t taxed in the fund, so a lender that counts consistent voluntary contributions adds the full $8,000. The surplus becomes $6,948 once these records are in the file.
- Member statements for the last three years showing each contribution.
- Fund bank statements showing the deposits arriving.
- Payslips showing the employer contributions for each member.
Some shortfalls need specialist restructuring before submission instead. Refer these to the fund’s adviser or lawyer.
- The lender requires a corporate trustee and the fund has individual trustees, so the trustee and the ownership records must change.
- The plan relies on contributions above the $32,500 concessional cap.
- The tenant is related to a member or pays below-market rent.
- A member has lent money to the fund without a written loan agreement, which the ATO says can be treated as a contribution.
- A member can’t or won’t sign the personal guarantee the lender requires.
Related-Party Loans When Banks Decline
A related-party loan is an LRBA where a member, relative or related company lends to the fund instead of a bank. The ATO allows it on arm’s length terms, and the 10 August 2026 change applies to related-party lenders too. That means a related-party loan can refinance an existing residential LRBA but can’t fund a new residential purchase contracted on or after that date.
The ATO’s Practical Compliance Guideline PCG 2016/5 sets safe harbour terms the ATO accepts as arm’s length for real property. Its interest rate is the Reserve Bank of Australia (RBA) indicator rate for standard variable investor housing loans published for May before each financial year. The ATO’s rate table, updated 11 September 2026, gives 9.35% for real property in 2026–27.
| Term | Related-party loan on safe harbour terms | Third-party lender |
|---|---|---|
| Maximum LVR | 70% | 60% to 90%, depending on the lender and tier |
| Maximum term | 15 years, less the time already run on earlier loans for the same asset | Up to 30 years at Firstmac, La Trobe Financial and Bluestone |
| Interest rate | 9.35% for 2026–27 | The lender’s own rate |
| Repayments | Monthly principal and interest | Principal and interest, with interest-only periods at some lenders |
| Personal guarantee | Not required | Required by AMP and Firstmac |
| New residential purchase after 10 August 2026 | Not allowed | Not allowed |
A loan outside the safe harbour terms isn’t automatically non-compliant. The trustee must then show arm’s length terms another way, such as evidence that they match a commercial loan available in the same circumstances.
The fund’s adviser must confirm these terms before you rely on a related-party loan.
- The rate, LVR, term and repayment schedule, with evidence that the fund pays no more than an arm’s length rate.
- A written, executed loan agreement, without which the ATO can treat the money as a contribution.
- The effect on each member’s total superannuation balance (TSB). The outstanding loan can count toward it when the lender is a related party and the member has met a condition of release, such as retirement.
- Where the related party’s own money comes from, because a related lender that borrowed it can’t use the fund’s property as security.
The fund also can’t make a loan to a related party. Lending to a member or relative is a separate prohibited investment, not a form of SMSF loan.
Assess a Residential Investment Loan
Assess an SMSF investment loan on the fund’s numbers first, then check separately how the loan affects each member’s own borrowing. A fund that services comfortably can still leave a member with less capacity for a personal home loan.
On the fund side, the fictional Kestrel fund shows a $3,538 surplus and $323,000 in liquid assets. Those figures come entirely from the fund’s rent, contributions and assets.
On the member side, the first member plans to apply for a personal home loan next year. The fund’s repayments don’t appear in that application.
The member’s personal guarantee appears as a liability the new lender assesses. Moneysmart’s guarantor guide says a guarantor must disclose guaranteed loans to any new lender, which may decline even when the borrower keeps up repayments.
Contributions also cross between the fund’s assessment and the member’s own loan serviceability test. Salary sacrifice lowers the member’s take-home pay, and after-tax contributions come from money the member’s own lender would otherwise count as spare income. A contribution that fixes the fund’s cash flow can reduce the member’s personal borrowing capacity.
Property, Structure and Work That Need a Different Lender or a Specialist Check
Check the property, structure and planned work against each lender before you prepare a submission. These cases change the lender list or need a specialist check.
- Off-the-plan security. AMP’s SMSF loan page, as at October 2026, excludes it.
- Rural property. AMP excludes rural security, and Bluestone’s page, as at October 2026, accepts rural residential property up to 2 hectares.
- Multiple dwellings on one title or more than one title. Firstmac’s 10 September 2026 sheet excludes the first, while super law treats separate titles as separate assets that one LRBA can’t buy.
- Vacant land or a construction loan. Borrowed money can’t improve an asset, and the ATO doesn’t allow an LRBA to build a house on land the fund owns. The construction loan requirements guide covers building finance outside super.
- A renovation loan or top-up. LRBA money can pay for repairs and maintenance but not improvements, and drawdowns for improvements aren’t allowed on LRBAs entered from 7 July 2010.
- Individual trustees. AMP and Bluestone lend only to funds with a corporate trustee, as does Pepper Money on its SMSF page as at October 2026.
- A property the fund plans to lease to a member’s business. That’s a business real property question for the SMSF commercial property loan guide.
Refinance an Existing SMSF Loan
An existing residential SMSF loan can be refinanced on or after 10 August 2026. The ATO treats a new loan contract for the same asset, with the same or a new lender, as a refinance of the original arrangement.
Check the Existing Arrangement First
Work through these checks before you compare lenders. Each one can stop the refinance or change which lender fits.
- Read the existing loan agreement and confirm the date the LRBA was entered.
- Confirm the fund trustee, holding trustee and holding trust deed are current and match the title.
- Confirm the property is still a residential investment with an unrelated tenant and no borrowed money spent on improvements.
- Obtain a payout figure and the statements the proposed lender asks for.
- Test the proposed lender’s criteria, including trustee type, net assets, LVR tier and repayment type.
If the refinance moves the property to a new holding trust, the ATO requires the asset to transfer directly to that trust. The fund must not take title temporarily during the switch.
Compare Costs, Liquidity and Security
Put the current loan beside the proposed one, because a lower rate can mislead once fees and a lost offset are counted. This fictional fund entered its LRBA in March 2021 and now owes $410,000 on a property valued at $700,000, an LVR of 59%.
| Item | Current loan | Proposed loan |
|---|---|---|
| Lender and rate | Current lender at an assumed 8.4% variable | Firstmac SMSF 60 at 7.09% variable |
| Offset | Linked offset holding $40,000 of fund cash | No offset or redraw |
| Interest in the first year, approximately | $31,080, charged on $370,000 after the offset | $29,069, charged on $410,000 |
| Switching costs | Assumed $400 discharge fee | $221 valuation and an assumed $1,000 for the fund’s legal review |
| Security | Existing mortgage | Within the 60% LVR tier, with members’ personal guarantees |
Firstmac’s rate and fees come from its 10 September 2026 product sheet. The first-year interest figures ignore principal repaid during the year.
The rate gap saves about $2,000 in the first year, and switching costs absorb most of it. The fund gains more only if it earns a return on the $40,000 elsewhere, and the members accept the personal guarantees.
Liquidity changes as well. Without an offset, the $40,000 sits in the fund’s ordinary cash account, where it still counts as a liquid fund asset.
Questions for the Fund’s Adviser and Lawyer
Confirm these legal and super points with the fund’s adviser or lawyer before the fund changes the arrangement.
- Any amount above the payout figure and costs. With a related-party lender, a larger loan can bring the debt into a member’s TSB. A new purpose can also start a new arrangement, which the 10 August 2026 change would then cover.
- Any new holding trust or new holding trustee the refinance creates.
- For a related-party lender, whether the remaining term fits the safe harbour’s 15 years, less the time the earlier loan has already run.
- Any change of trustee and ownership records that a lender’s corporate trustee requirement forces.
- Fixed-rate break costs on the current loan, measured against the saving.
Assess Offset and Cash Account Eligibility
An SMSF loan with an offset account suits the LRBA rules when the lender links a genuine offset account to it. The account must come from an authorised deposit-taking institution (ADI) and be held by the fund trustee for the fund. The ATO accepts a genuine ADI offset because it isn’t a borrowing or a charge over fund assets.
The ATO adds that an offset from a lender that isn’t an ADI isn’t a bank deposit, so the fund needs due diligence on that arrangement. Account ownership follows the ATO’s ownership rules for SMSF assets. Fund money sits in the trustee’s name as trustee for the fund, never in a member’s personal account.
Lenders differ on whether they link an offset at all. AMP’s SuperEdge target market determination, dated 24 November 2025, allows a linked offset deposit account on a variable-rate loan with no redraw. Firstmac’s 10 September 2026 sheet lists no offset or redraw, and La Trobe Financial’s page, as at October 2026, lists no redraw.
Verify three points with the lender before you rely on an offset.
- Confirm the offset account is held by the fund trustee for the fund, which is also the borrower.
- Confirm which loan portion the offset reduces. AMP’s SuperEdge is variable rate only, so no fixed split sits outside it.
- Ask whether the offset balance counts toward the lender’s liquidity test, which AMP’s documents checklist applies to SMSF refinances.
Redraw raises a separate question. The ATO says each drawdown from a loan facility is a separate borrowing, even where the loan provides for redraw. Redrawn money must therefore meet the LRBA rules on its own.
Linked Offset or Ordinary Fund Cash Account
A lender-approved linked offset and an ordinary SMSF cash account both hold fund money, but only the offset reduces the loan’s interest. The holding trust can also run a cash account, under tighter limits.
| Account | Held by | Effect on the loan | Compliance point |
|---|---|---|---|
| Linked offset from an ADI lender | Fund trustee for the fund | Reduces the interest charged | The ATO accepts a genuine ADI offset |
| Ordinary SMSF cash account | Fund trustee for the fund | None | Counts as a liquid fund asset |
| Holding trust cash account | Holding trustee | None | The ATO allows it for property income and expenses only, never as a trading account |
| Offset-style account from a non-ADI lender | As the lender’s terms set | Depends on the terms | Not a bank deposit, so the fund needs due diligence |
Get specialist confirmation before the fund moves money in ways that touch the trust structure. Moving fund cash into an offset is an investment decision for the investment strategy. Money paid from a member’s personal account counts as a contribution toward the caps.
Before submission, confirm the offset terms and account ownership with the lender in writing and record them in the file. Then submit the application with the structure, cash-flow figures and documents agreed with the fund’s adviser.
