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ISCOVER
Jessica Darnbrough
Highlighting just how big the self-managed super fund (SMSF) loan sector is becoming, one of Australia’s non-major lenders has taken the plunge and entered the space for the first time.
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Yesterday, AMP Bank announced it would launch the AMP SuperEdge SMSF product with a variable interest rate of 6.70 per cent per annum.
AMP SuperEdge enables trustees to borrow within their SMSF to buy a residential investment property or refinance an existing SMSF loan. The loan is repaid from the property’s rental income and contributions paid into the fund.
AMP Bank chief operating officer Rob Slocombe said a growing number of SMSF trustees are looking to add bricks and mortar investments to their SMSF and AMP is uniquely positioned to offer this type of loan.
“People want diversity in their SMSF investments,” Mr Slocombe said. “There was a strong level of interest in AMP SuperEdge in a pre-launch trial as it helps trustees add property to their fund using an attractively priced loan.”
“The loan will be offered through AMP’s network of accredited mortgage brokers and financial planners as well as direct to customers. It’s got many of the same features as a regular home loan so it will feel very familiar to customers, planners and brokers.”
The SMSF sector is the largest and fastest growing superannuation sector in Australia.
“Now is the right time for AMP to launch this product. AMP has a strong focus on SMSF within the business and good relationships with financial planners and brokers,” he said.
“AMP Bank’s sales team has also undergone SMSF training to ensure the right expertise in this relatively new sector.”
According to a statement from the bank, the new loan will link to an offset account that may act as the SMSF’s cash management account, with super contributions and the property’s rental income paid into the offset account, thereby reducing the interest due on the loan.
The product will include a maximum loan to value ratio of 80 per cent and give borrowers the choice of principal and interest or interest-only repayments.
It will also include a 100 per cent mortgage offset account, available with zero opening balance and unlimited free transactions, including rediATM/eftpos in Australia, BankNet, BankPhone, direct debit, direct credit, BPAY© and cheque book.
