AMP exits SMSF property lending

Financial services firm AMP has joined the big four banks in discontinuing SMSF property lending.

The announcement follows similar moves by Commonwealth Bank of Australia and Westpac in recent weeks.

While AMP will continue supporting existing SMSF home loan customers, they will not be permitted to switch to interest-only loans, internally refinance or extend their loan term from November.

RateCity research director Sally Tindall said the writing could be on the wall for SMSF property lending following the announcement.

Tindall pointed to the 2014 Financial System Inquiry, which recommended the government remove the exception to the general prohibition on direct borrowing for limited recourse borrowing arrangements by super funds.

Prime Minister Scott Morrison, who was then treasurer, rejected the recommendation at the time.

“Today’s announcement from AMP comes as a shock to no one,” Tindall said.

“AMP’s new chairman, David Murray, has been one of the most vocal critics of self-managed super fund property lending.”

With banks looking to reduce risk in their loan books and the property market declining, it is unsurprising lenders are withdrawing from this kind of lending, she said.

“Macquarie Bank, Bendigo Bank and Bank of Queensland are now the biggest banks in a dwindling pool of providers offering SMSF property loans,” she said.

Lenders offering SMSF loans from next month include La Trobe Financial, Bank Australia, Bank of Queensland and Bendigo Bank.

Copyright © SMS Magazine 2024

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital