Speaking to SMSF Adviser, BDO national leader, superannuation Paul Rafton said with the increases in the cash rate in recent months, there’s also been a bit of movement around limited recourse borrowing arrangements.

“Some mortgage brokers have been suggesting that there may be an opportunity refinance at a better rate before rates creep up [further],” said Mr Rafton.

This is particularly the case for older, legacy SMSF loan products that are no longer offered on the market, he said, as there tends to be more of a premium charged in terms of the interest rate for these products.

With some of the uncertainties in the market, Mr Rafton said he is seeing very limited take-up of new LRBAs by SMSFs at the moment with either related party loans or those obtained through third party lenders.

Following the first rate rise in May this year, SMSF Loan Experts managing director Yannick Ieko said the gap in interest rates being offered by different lenders had widened.

Mr leko said while some lenders had been passing on the full increase, others had only passed on part of the increase.

He also warned that the interest rates being offered by lenders that have ceased offering their products to new customers are typically less attractive.

“Those rates tend to be less competitive by virtue of the fact that they’re not in that space anymore,” he explained.

“Given these banks don’t particularly want these loans they’ll probably look to make those loans as profitable as they can.”

Mortgage Ezy executive director Peter James agreed that with competition in the SMSF loans space only really picking up a couple of years ago, the interest rates for older types of SMSF loans are sometimes higher.

“Interest rates are typically not as important to a trustee as they are to a Mum and Dad borrower. Superannuation funds tend to be very conservative and borrow at very low LVRs and often the rent will well and truly cover the repayments. So the rate rises aren’t stressing them as much [as other borrowers],” he told SMSF Adviser in September.

“However, the banks have adjusted their rates since departing the market, and while interest rates might not have been top of mind for trustees previously, now that we’ve had [further increases] to rates, some of those interest payments are looking very, very high.”

Since April this year there has been a 3 per cent increase in the cash rate.

AMP Capital chief economist Shane Oliver said given the upside risks of wages growth, there is a high risk of one final 0.25 per cent hike to 3.35 per cent in February.

“[However], by end 2023 or early 2024, we expect the RBA to start cutting rates,” he said.

Mr Oliver said banks were likely to pass the RBA’s rate hike on in full to their variable rate customers.

“This will take variable mortgage rates to their highest levels since 2012. In other words, roughly 10 years of falling mortgage rates have been reversed in eight months,” he said.