Fixed Rate Margin Lending

[Sugar Dunkaton]

Hi Guys & Girls,

Seem like everyone is pretty down on Margin Lending at the moment, but i have been revolving my one over for the last couple of years (low LVR).

Just wanted to find out if anyone is using fixed margin loans as opposed to the variable margin loans. My Commsec loan only offers a single rate (I am currently paying 9.6%).

Who is the best provider to go to in order to get the lowest fixed rates possible. I think i would try and split my loan up 50/50 for variable and fixed as a bit of a hedge - its very rare that i have a zero balance - my blue chips i will just hold until i die, but will need the variable there to trade with.

 

[skyQuake]

Hi Guys & Girls,

Seem like everyone is pretty down on Margin Lending at the moment, but i have been revolving my one over for the last couple of years (low LVR).

Just wanted to find out if anyone is using fixed margin loans as opposed to the variable margin loans. My Commsec loan only offers a single rate (I am currently paying 9.6%).

Who is the best provider to go to in order to get the lowest fixed rates possible. I think i would try and split my loan up 50/50 for variable and fixed as a bit of a hedge - its very rare that i have a zero balance - my blue chips i will just hold until i die, but will need the variable there to trade with.

Why not just do CFDs instead? Its essentially a margin loan (except u cant pay interest upfront)
And they generally charge u RBA+2.5%; Cheaper brokerage too.

 

[skc]

Have a look here and see if anything useful.

http://www.canstar.com.au/margin-loans/compare/shares/

Why not just do CFDs instead? Its essentially a margin loan (except u cant pay interest upfront)
And they generally charge u RBA+2.5%; Cheaper brokerage too.

With CFDs you pay interest on the full position marked to market. That's pretty steep for a guy who is buy-and-hold-till-he-dies-with-blue-chip kind of investor...

At least with margin loan your interest expense doesn't increase with the success of your investments.

 

[skyQuake]

Have a look here and see if anything useful.

http://www.canstar.com.au/margin-loans/compare/shares/



With CFDs you pay interest on the full position marked to market. That's pretty steep for a guy who is buy-and-hold-till-he-dies-with-blue-chip kind of investor...

At least with margin loan your interest expense doesn't increase with the success of your investments.

oops, forgot that ur cash doesnt offset the cash borrowed to fund a possie. Maybe one day a provider may offer that...

 

[skc]

oops, forgot that ur cash doesnt offset the cash borrowed to fund a possie. Maybe one day a provider may offer that...

I use MF Global and they pay me interest (base rate +1%) on my gross liquidated value. It still doesn't fully offset long interest as those are charged at +1.75%.

But that's about as good as deal as you can get.

 

[Sugar Dunkaton]

Thanks for your interest, although i am more comfortable with my margin loan at the moment.

Is anyone else using a margin loan at the moment or have we all switched to CFD's - i am starting to think i have fallen behind the curve - although as a Long Term investment product i really think margin lending is still useful - especially given i already have an existing portfolio - there is no way to transfer that into CFD's... and you could draw out capital from an existing portfolio with CFD's either.

Anyways, I have had some quotes in the high to mid 8's for fixed interest rates - anyone know where i can get this down?

 

[tech/a]

I use IB with 4:1 day trading and 2:1 overnight.
I dont worry about the %.
If thats the determining factor in your trading method then you need to look at your trading method! IE get it more profitable!
OR
Dont use margin you cant afford it!

 

[Sugar Dunkaton]

I use IB with 4:1 day trading and 2:1 overnight.
I dont worry about the %.
If thats the determining factor in your trading method then you need to look at your trading method! IE get it more profitable!
OR
Dont use margin you cant afford it!

Why pay more than I have too?

 

[Sugar Dunkaton]

Why pay more than I have too?

just got a sweet deal on a refinance.