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Margin Loans Margin loan interest rate

Discussion in 'Finance & Banking' started by Simon Hampel, 11th Feb, 2007.

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What is your current margin loan interest rate ?

Poll closed 11th Mar, 2007.
  1. 9.5% or higher

    0 vote(s)
    0.0%
  2. 9.25 - 9.49%

    2 vote(s)
    4.7%
  3. 9.00 - 9.24%

    9 vote(s)
    20.9%
  4. 8.75 - 8.99%

    7 vote(s)
    16.3%
  5. 8.50 - 8.74%

    12 vote(s)
    27.9%
  6. 8.25 - 8.49%

    3 vote(s)
    7.0%
  7. 8.00 - 8.24%

    8 vote(s)
    18.6%
  8. 7.75 - 7.99%

    1 vote(s)
    2.3%
  9. 7.50 - 7.74%

    0 vote(s)
    0.0%
  10. less than 7.5%

    1 vote(s)
    2.3%
  1. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Sydney, Australia
    Just wondering what interest rate everyone is paying on their margin loans at the moment.
     
  2. MJK

    MJK Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    280
    I'm paying 8.6% at the moment with an LVR at 43%. If I where to buy another hundred I would get a further discount of .25% making it 8.35%

    MJK:D
     
  3. DaveJ

    DaveJ Well-Known Member

    Joined:
    13th Nov, 2005
    Posts:
    123
    Is it possible to compare interest rates with amount borrowed? It is a lot easier to negotiate a bigger discount when you have a large or VERY large margin loan. I have found any loan less then $250k and you won't get much, if any discount.

    Thoughts?
     
  4. MJK

    MJK Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    280
    Agreed. I suspect anyone getting below 8% has got a a few mil margined up?
     
  5. gazza

    gazza Well-Known Member

    Joined:
    15th Aug, 2005
    Posts:
    214
    Location:
    Canberra
    I have around 600K borrowed at 8.55 with Colonial so am very keen to hear from those who are under 8% - how much have you borrowed and with whom?
     
  6. DaveJ

    DaveJ Well-Known Member

    Joined:
    13th Nov, 2005
    Posts:
    123
    I'm fluctuating through $250k+ and arguing (nicely) for around 8.8% from the standard 9.15%. Not sure how successful i will be!:rolleyes:

    (leveraged Equities)
     
  7. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Location:
    Sydney, Australia
    Leveq will take 0.25% off for every $250K of loan, up to $1m (1% off their standard rate of 9.15% makes it 8.15%) - without question.
     
  8. Bantam Roosta

    Bantam Roosta Well-Known Member

    Joined:
    7th Feb, 2007
    Posts:
    115
    Location:
    Canberra, ACT
    My margin loan is for about $20,000 (no mistake) and I get .25% off the variable because I have the wealth package with CBA. I'm paying 8.65%
     
  9. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    That's a pretty good rate for such a small loan - well done BR.
     
  10. MrDarcy

    MrDarcy Well-Known Member

    Joined:
    13th Sep, 2005
    Posts:
    283
    Location:
    Sydney
    Polls assumes only one rate !

    I have about 8 rates with combination of lenders, fixed and variable, so I took an average.
     
  11. MichaelWhyte

    MichaelWhyte Well-Known Member

    Joined:
    5th Oct, 2005
    Posts:
    798
    Location:
    Sydney, NSW
    Hi guys,

    I'm shopping around right now and can attest that they all have the same headline rate of around 9.15% but discount from there based on amount invested. Of course, wealth packages and the like change the game as does a bit of honest hard bargaining.

    My borrowings will be between $300K and $700K depending on how much I want to stretch my margin, but 8.6% seems to be the rate I'll be getting unless I push leveraged equities to drop me to 8.4% on a $700K lend. They've already said 8.6% on $500K.

    As an aside, most will lend up to 70% on Navra I've found. That makes it a pretty conservative fund in their opinion which is nice to know.

    Cheers,
    Michael.
     
  12. Glebe

    Glebe Well-Known Member

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    15th Aug, 2005
    Posts:
    932
    Location:
    Sydney, NSW
    Thanks for the heads up Michael.
     
  13. bazza52

    bazza52 Member

    Joined:
    4th Dec, 2006
    Posts:
    17
    Location:
    Canberra
    I have 55k with Lift Capital (on Navra's recommendation), rate is 9.0% (which after reading this thread doesn't sound too hot!).

    If I were able to shop around and find a better rate, how painful is it (with fees and time) to switch to a different lender? For a small discount may not be worth it?
     
  14. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Location:
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    It's pretty easy to swap - but with a loan size of $55K, your rate of 9% is pretty much average ... possibly even slightly less than average.

    Always worth shopping around - but check LVRs on offer too ... you may get a slightly better rate at the cost of a smaller buffer due to lower LVRs. You'll have to decide which is more important.

    Put it this way ... 0.25% discount on a $55K loan is worth $137.50 ... not a huge amount in the grand scheme of things.
     
  15. NickM

    NickM Co-founder Staff Member

    Joined:
    20th Jun, 2005
    Posts:
    321
    Location:
    Sydney
    8.15% loan at 62K.
    Main reason is because i am also a Fin Planner i get to dial down any commissions i would otherwise receive.
     
  16. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    mmm ... me thinks I need to negotiate a bit harder!
     
  17. seaview

    seaview Well-Known Member

    Joined:
    8th Jun, 2006
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    77
    Location:
    NEWCASTLE
    The guy at www.investdirect.com.au said he can negotiate margin loan rates lower than most planners as he has bulk buying power and rebates most of the commission back to us. A lot with doctors, dentists and engineers use him, so he must be doing something right. Anyway I am about to get him to renegotiate our rate. He was shocked that our Navra planner only got us 8.6% for over 500k from LE and says he can do much better.
     
  18. Jenny

    Jenny Well-Known Member

    Joined:
    15th Aug, 2005
    Posts:
    103
    Location:
    Canberra
    mmmm keep me posted. I'm with LE 8.6% on $550k.

    Jenny
     
  19. DaveJ

    DaveJ Well-Known Member

    Joined:
    13th Nov, 2005
    Posts:
    123
    LE offered the following after a little discussion:

    < 250k = 8.9%
    250k-499k = 8.8%
    500k+ = 8.6%

    Rate automtically adjusts with the margin balance

    DaveJ
     
  20. bazza52

    bazza52 Member

    Joined:
    4th Dec, 2006
    Posts:
    17
    Location:
    Canberra