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at 1:00 pm on February 16, 2021 | 16 comments
Back in 2016, David Murray – the chairman of the Financial System Inquiry (FSI) – recommended self-managed superannuation funds (SMSFs) be banned from borrowing to invest because of risks to the financial system:
“Superannuation funds should not be leveraged, including SMSFs, because leverage magnifies risk. If the system is unleveraged, then if asset prices rise, bubble and fall then all the loss is contained within the superannuation funds and does not have another contagion effect because there are no forced sellers of other assets”.
In 2019, the Council of Financial Regulators (CoFR) backed David Murray’s call, recommending the federal government ban property investment via SMSFs after 18,000 of these Funds were found to have more than 90% of their savings in a single asset class, specifically investment properties. However, its recommendation was snubbed by Treasurer Josh
Non-bank lenders are diving headfirst into controversial lending arrangements that allow self-managed super funds to leverage investment properties amid a powerful upswing in house prices.
BMM offers new SMSF product
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Sarah Buckley
Sarah Buckley
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The non-bank lender has announced a new SMSF product, offering interest rate predictability and flexibility for property investors.
Better Mortgage Management (BMM) has announced a new product range, Aspire, which aims to offer “simplicity, interest rate predictability and flexibility with self-managed super fund (SMSF) residential and commercial property investment”, according to the non-bank lender.
Aspire SMSF Residential has a 100 per cent offset account available as well as loans of up to 80 per cent loan-to-value ratio (LVR). Rates start from 4.84 per cent and risk fees ranging from 0 to 0.50 per cent, according to BMM.