Join our investing community

A question margin loans

Discussion in 'General Investing Discussion' started by builder2818, 31st Dec, 2008.

  1. builder2818

    builder2818 Well-Known Member

    Joined:
    31st Dec, 2008
    Posts:
    89
    Location:
    Sydney
    I am fairly new to investing and for nearly 12 months now, have invested money in the stockmarket. I put $80k of my own money and borrowed $40k for a margin loan. It was fixed for 3 years at 9.4%.

    With the poor state of the economy at the moment and interest rates going down I am starting to wonder if this margin loan was worth it. Can I repay the principle on the loan whenever I want? Will this reduce the amount of interest I have to pay (currently $3800p.a. upfront)?
     
  2. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    Hi Builder,

    If you've locked in a loan there may be fees or charges to get out of it. You'd have to check with your individual margin lender to find out specifically what these may be.

    Cheers,

    Dan
     
  3. builder2818

    builder2818 Well-Known Member

    Joined:
    31st Dec, 2008
    Posts:
    89
    Location:
    Sydney
    I rang them up. I have to send them an email explaining my enquiry about what the economic costs/fees would be to break from a fixed loan to a variable. Just waiting for them to reply now. Still wondering though if it would be more beneficial to pay any fees now and less interest in the future.