Finance & property Australia
SMSF Loan Calculator
The question that decides an SMSF property purchase is not the repayment — it is whether the fund can meet it. Rent plus contributions has to cover the loan and the costs every year, in a fund that cannot simply top itself up.
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SMSF loans price above standard lending
Rates, insurance, management, maintenance
Audit, administration, advice
Contributions needed each year
—Loan repayment a year
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Net rent after costs
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Loan to value
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Cap headroom
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Working with a different rate? Edit the rates this calculator uses
These are the figures we verified on 2026-10-28. Change them to work with a historic period, or with a new rate that has been announced but which we have not published yet.
Concessional contributions cap for 2026–27, indexed to AWOTE in $2,500 steps and lifted from $30,000 on 1 July 2026
General information, not advice. General information only, not financial, tax or superannuation advice. Limited recourse borrowing arrangements are complex, tightly regulated and difficult to unwind, and getting the structure wrong can cause serious compliance consequences for the fund. Contribution caps, the sole purpose test and related-party rules all apply. Speak to a licensed SMSF adviser and the fund's auditor before proceeding.
How does an SMSF loan work?
Through a limited recourse borrowing arrangement. The fund borrows to buy a single asset held in a separate trust, and the lender's recourse is limited to that asset alone — the fund's other assets are protected. The fund must service the loan from rent and contributions, within the contribution caps.
SMSF property borrowing changed on 10 August 2026
A limited recourse borrowing arrangement entered into on or after 10 August 2026 can only be used to buy business real property: land and buildings used wholly and exclusively in a business. It can no longer be used to buy residential property, and the restriction applies to every lender, whether a bank, a non-bank lender or a related party. The ATO says LRBAs are not banned, and the rules for other assets are unchanged.
If an SMSF already had an LRBA for real property before 10 August 2026, or exchanged a binding contract to buy before that date, the change does not apply, even if settlement or the loan comes later, and the fund can maintain or refinance that loan. Use this calculator for a commercial property purchase, or to model an arrangement that pre-dates the change.
For a related-party loan the ATO's safe harbour interest rate for real property LRBAs is 9.35% for 2026–27 (PCG 2016/5), which is the rate to enter if the lender is a related party and you want to follow the ATO's safe harbour terms.
What limited recourse actually means
The lender's recourse is limited to the asset itself. If the fund defaults, the lender can take the property and nothing else — the fund's other investments are protected.
That protection is the reason the structure exists and the reason it costs more. SMSF loans carry higher rates than standard lending, require larger deposits, and come from a narrower set of lenders.
The asset is held in a separate holding trust until the loan is repaid, with the fund holding a beneficial interest. That structure has to be established correctly before settlement — getting it wrong afterwards is expensive and sometimes not fixable.
One asset, and no improvements
A limited recourse borrowing arrangement can only be used to acquire a single acquirable asset. One property, one arrangement.
Borrowed funds also cannot be used to *improve* the asset. Repairs and maintenance are permitted; improvements that change the character of the property are not, and the line between them is narrower than most people assume. Adding a room is an improvement. Replacing a roof is generally a repair.
That restriction rules out the renovation strategies that make property attractive outside super, and it catches people who bought expecting to add value.
How this is calculated
Standard amortisation for the loan, then the fund's cash flow around it.
loan = price − depositmonthly repayment = L × r ÷ (1 − (1 + r)⁻ⁿ)gross rent = weekly rent × 52net rent = gross rent − property costs − tax on net rental incomeshortfall = annual repayment + fund running costs − net rentcontributions needed = shortfall, spread across contributing membersloan to value = loan ÷ price
The shortfall is the number that matters. An SMSF cannot borrow more to cover a gap — the borrowing is limited to the single acquirable asset — so any shortfall must be met from contributions, and contributions are capped.
That makes an SMSF property purchase far less forgiving than the same purchase held personally. Outside super, a gap can be covered from salary. Inside it, a gap that exceeds the caps is a problem the fund cannot solve without selling.
A worked example: a $700,000 property
Bought with a $250,000 deposit from the fund, a $450,000 loan at 7.2% over 25 years, renting for $620 a week, with $7,500 of property costs and $4,000 of fund running costs, two members contributing.
- Loan amount$450,000
- Loan to value64%
- Gross rent — $620 × 52$32,240
- Less property costs−$7,500
- Annual loan repaymentsee the result above
- Shortfall met by contributionssee the result above
The figures above are computed live. The question they answer is whether two members can cover the shortfall inside their caps, every year, for twenty-five years.
Note what happens if a member stops working, or the property sits vacant for a quarter. Those are the scenarios worth entering before committing, not after.
The costs that decide it
Running an SMSF has a fixed annual cost — audit, administration, and usually advice — that does not scale down with the fund's size. On a small balance, that fixed cost is a meaningful drag before any investment decision is made.
Add a property and the costs compound: higher loan rates, a holding trust to establish and maintain, lenders who charge more for the structure, and the ordinary property costs on top.
Which is why the sensible test is not whether the property will grow. It is whether the fund can meet every repayment for the full term, through a vacancy, a rate rise and a member's changed circumstances — because the fund has no other way to find the money.
Liquidity is the other thing to check. A fund with most of its value in one property can struggle to pay a member benefit when one falls due.
What this calculator does not do
- Assumes one fixed interest rate for the whole term
- Excludes stamp duty, establishment costs and the holding trust's setup
- Does not model contribution caps per member in detail — it flags proximity only
- Ignores the transition to pension phase and its effect on fund tax
- Does not test the sole purpose test or related-party acquisition rules
- A new loan from 10 August 2026 can only buy business real property, not residential property
Common questions
Can an SMSF still borrow to buy residential property?
Not under a new limited recourse borrowing arrangement entered into on or after 10 August 2026. Arrangements that were in place, or contracts exchanged, before that date are not affected.
Can an SMSF borrow to buy property?
Yes, through a limited recourse borrowing arrangement. The fund borrows to acquire a single asset held in a separate trust, with the lender's recourse limited to that asset.
Why are SMSF loan rates higher?
Because the lender's recourse is limited to the property alone, and the structure is more complex to administer. Fewer lenders offer them, and deposits required are typically larger.
Can borrowed money be used to renovate?
No. Borrowed funds under an LRBA cannot be used to improve the asset. Repairs and maintenance are permitted; improvements that change the property's character are not.
What happens if the fund cannot make a repayment?
The fund cannot borrow more — the borrowing is limited to the single asset. Any shortfall must come from contributions, which are capped, or the property may have to be sold.
How much deposit does an SMSF need?
More than a standard purchase. Lenders typically require a substantially lower loan-to-value ratio for LRBAs, and the fund needs liquidity left over afterwards to meet costs and benefits.
Where these numbers come from
- Australian Taxation Office — about LRBAs How an LRBA is structured
- Australian Taxation Office — contributions caps The 2026–27 concessional cap of $32,500
- Moneysmart — self-managed super funds Australian Government guidance on SMSF costs and suitability
- Australian Taxation Office — about LRBAs How an LRBA is structured
Rates last verified 2026-10-28 Every figure the Australian Taxation Office sets is re-checked against the source at least once a year, and again whenever a change is announced. Out of date? Tell us and we will fix it.
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