The 10 August ban ended new residential borrowing in super — but if your fund already has a loan, nothing about it died. Including, unfortunately, the rate. SMSF loans have always been priced high, and thousands of funds are sitting on legacy rates well above what the remaining SMSF lenders charge today.
Here’s the part many trustees miss: refinancing is still allowed. The ban stops new residential LRBAs; a like-for-like refinance of an existing loan is not a new borrowing in that sense — it replaces one compliant loan with a cheaper one.
Why this matters more after the ban, not less
- Lender exits. With no new-loan market to chase, some lenders are quietly leaving SMSF lending. Every exit shrinks your refinance options — the funds that move early get the best of what’s left.
- The loyalty tax is worse in super. No one shops an SMSF loan on the weekend. Lenders know it, and legacy books drift upward.
- Every dollar saved compounds in the fund. Interest saved is retirement money, not lifestyle money.
What a like-for-like refinance involves
Same property, same structure, no cash out. The incoming lender values the property, reviews the bare trust deeds and the fund’s liquidity, and replaces the loan. The structure you paid to set up stays; the rate doesn’t. Typical timeline is four to eight weeks.
Worked example
A fund with a $500,000 legacy LRBA at 8.4% refinances at 6.9%: $7,500 a year back into the fund — roughly $75,000 over a decade before compounding, for a few weeks of paperwork we mostly handle.
When to move
Before your lender exits, not after. A loan with a departed lender keeps running, but repricing gets ugly and your escape routes narrow. If your SMSF rate starts with a 7, an 8 — or you don’t actually know what it is — that’s the sign.
Common questions
Is refinancing an SMSF loan still allowed after the ban?
Yes. The ban stops new residential LRBAs; refinancing an existing LRBA on a like-for-like basis remains permitted. The loan swaps lender, the compliant structure stays.
What does “like-for-like” mean in practice?
Same asset, same borrower structure, and no increase in the amount borrowed — you're replacing the existing loan, not extracting equity. Rate, term and lender can all improve.
Will the bare trust need to be redone?
Usually not — the bare trust and holding structure typically stay in place; the incoming lender reviews the deeds rather than rebuilding them. Legal review is part of the process, but it's far lighter than the original setup.
How much difference can a refinance make?
Legacy SMSF loans commonly sit 1–2%+ above the sharpest SMSF refinance rates in the market. On a $500,000 loan, each 1% is $5,000 a year of the fund's money — compounding inside super.
Related: the full story of the ban · what we still arrange for SMSFs
General information only, not financial, tax or legal advice. SMSF decisions should involve your licensed financial adviser and accountant; we arrange the credit side alongside them. Rules current at 18 August 2026.
