When should you refinance your SMSF loan?

The problem with loyalty

When you first settled your SMSF loan, there was a good chance it was competitive at the time. But lending markets change, and the rate you received a few years ago may no longer be among the most competitive available.

Most lenders don't automatically review existing customers onto lower rates. Unless you ask or refinance, it's common for borrowers to stay on a rate that's no longer competitive.

Even a seemingly small difference can have a meaningful impact. Paying 0.50% to 1.50% more than necessary on a $500,000 loan could cost your fund around $2,500 to $7,500 each year, or $25,000 to $75,000 over ten years. That's money that could remain invested inside your super and continue working towards your retirement goals.

It could be time to refinance if

• Your SMSF loan hasn't been reviewed in over 18 to 24 months.
• Your lender hasn't proactively reduced your interest rate.
• Your property's value has increased since you purchased.
• Your SMSF has built up more assets or cash than when you first borrowed.
• You suspect new borrowers are receiving better rates than you.
• You're paying for features you don't use, or missing features you need.
• You're dissatisfied with your current lender's service or support.

Is refinancing an SMSF loan complicated?

An SMSF refinance involves more moving parts than a standard refinance. Depending on your existing structure and the incoming lender, this may include:

• Discharging your existing SMSF loan.
• Updating or establishing the required bare trust documentation.
• Coordinating with your accountant and solicitor to ensure the refinance remains compliant.
• Managing the legal documentation required for settlement.

We coordinate the entire process from start to finish. From your perspective, it's mostly a matter of providing information, reviewing documents and signing where required. We take care of the rest.

What does it cost to refinance an SMSF loan?

Like any refinance, there are costs to consider. These can include your current lender's discharge fees, establishment costs with the new lender, legal fees and, if applicable, break costs on a fixed-rate loan.

Before recommending a refinance, we'll calculate the total cost and compare it against the expected savings and any improvements to your loan structure or features.

If the numbers don't stack up, we'll tell you. Sometimes the right decision is to stay where you are and review your loan again later. We only recommend refinancing when there's a genuine benefit to your SMSF.

How does the free SMSF loan review work?

It starts with a quick conversation. We'll ask a few questions about your current loan, including your lender, interest rate, loan balance and the property's estimated value.

From there, we'll assess whether your loan is still competitive, compare it against suitable options available today and calculate whether refinancing is likely to deliver a genuine benefit after all costs are considered.

If there's a worthwhile opportunity, we'll explain your options and what the process looks like. If there isn't, we'll tell you. Sometimes the best outcome is to keep your existing loan and review it again down the track.