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Margin Loan rates - What rate are you paying ?

Discussion in 'Managed Funds & Index Funds' started by Here_To_Learn, 9th Jan, 2008.

  1. Here_To_Learn

    Here_To_Learn Well-Known Member

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    Happy New Year everyone !

    Thought I'd check in to see what interest rates other folks are receiving for their Margin Loans in '08.

    In my case I just received a .25% increase :mad: and am now in the mid 8's.
     
  2. crc_error

    crc_error The Rule of 72

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    9.25% for me with comsec .25 discount to their normal rate.

    {edit}

    sorry 9.4% is my rate

    however it seems comsec is getting nervous as I'm getting SMS's every couple of days to keep a eye on my margin loan due to 'market volatility'
     
  3. DaveA

    DaveA Well-Known Member

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    comsec base loan is 9.65%... so you must have some decent borrowings with a nice discount to be that low....
     
  4. Here_To_Learn

    Here_To_Learn Well-Known Member

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    Balance under 1.5Mill.
     
  5. MichaelWhyte

    MichaelWhyte Well-Known Member

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    9.05% with ANZ.

    They just rang me and offered another 10 basis points off my current rate because they were feeling nice. Didn't even have to ask for it...

    Cheers,
    Michael.
     
  6. crc_error

    crc_error The Rule of 72

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    but you have a very large loan balance with them though Michael!
     
  7. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Only $500K mate, nothing too serious...

    Cheers,
    Michael.
     
  8. crc_error

    crc_error The Rule of 72

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    I'm sitting at $300k atm. I think Sim here is the man with 7 figures!
     
  9. Smartypants

    Smartypants Well-Known Member

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    9.60 with BT. Initial margin loan was 300K but now sitting at around 250K.

    Don't want too many more rate increases.
     
  10. lorrimer

    lorrimer Well-Known Member

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    With Suncorp,

    Fixed > 500k 7.7%

    Variable 25k 9.0%
     
  11. Here_To_Learn

    Here_To_Learn Well-Known Member

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  12. Glebe

    Glebe Well-Known Member

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    Suncorp discount from March - Jun 30 each year.

    I'm at 7.65% with a loan of $550k. Its fixed for 12 months from Jun 30, 2007 to Jun 29, 2008. Not looking forward to renewing it.
     
  13. Here_To_Learn

    Here_To_Learn Well-Known Member

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    Glebe, you definitely got a good deal ! So I should wait until March then for their discounts ?
     
  14. lorrimer

    lorrimer Well-Known Member

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    Hi Carl,
    Same as Glebe. Fixed just before the end of the last financial year. Payed a year in advance and capitalised, in order to reduce my last tax bill. Was a wise move in retrospect however it has really had a detrimental effect on my LVR which has rocketed as a result,
    Regards,
    Lorrimer
     
  15. Glebe

    Glebe Well-Known Member

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    I didn't capitalise, but my LVR is 60% anyway, and I am going to find it tough to cough up $46k or so again. Got some saving to do between now and June!
     
  16. samaka

    samaka Well-Known Member

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    What do you mean by payed in advanced AND capitalised?

    I understand that if I pay for next years interest before 1st July then I can claim that this year - however where does the capitalising come in?

    Is capitalised interest tax-deductible?
     
  17. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    That just means that the money to pay the interest cost came out of the margin loan account, rather than them paying cash from other sources.
     
  18. samaka

    samaka Well-Known Member

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    Ah ok - so you drawdown the ML to pay the interest on the same loan - because straight capitalising wouldn't be tax deductible?
     
  19. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I'm not quite sure what you mean by "straight" capitalising ... is that as opposed to "crooked" or "curly" capitalising ? :p
     
  20. Rod_WA

    Rod_WA Well-Known Member

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    Sorry to divert the thread a little, but this will no doubt be answered very quickly...
    Say I have ML with $100k borrowed, with prepay interest rate 9%.
    So I'd pay $9k for interest before June 30. But if I capitalise within the same ML, do I have to prepay more interest to account for the variation from the standard interest calculation (eg effective rate 9.4%)? Or does the ML provider expect me to pay monthly for the variation? Or do I just get away with it? (That would be a very nice justification for capitalising, rather than tax avoidance!)