Margin Loans Types of share loans (apart from margin loan)

Discussion in 'Loans & Mortgage Brokers' started by DaveA__, 26th Apr, 2007.

Join Australia's most dynamic and respected property investment community
  1. DaveA__

    DaveA__ Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    580
    Location:
    Sydney, NSW
    are there any types of share loans around apart from margin loans?

    something similar to say a personal loan that you borrow to invest (but with out the 13% personal loan interest rate)

    i know comsec had one for high income earners but i cant find it on their website....

    otherwise im sure their are ones where you borrow and the protect your capital

    so id like to hear some thoughts if people have ever used these or if not why not?

    cheers
     
    DaveA__, 26th Apr, 2007
    #1
  2. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,415
    Location:
    Sydney
    What is it you don't like about margin loans ?
     
    Simon Hampel, 26th Apr, 2007
    #2
  3. DaveA__

    DaveA__ Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    580
    Location:
    Sydney, NSW
    nothing i love them....

    however im looking for the max deductible debt, if i can leave my money in my offset account saving non deductible interest and borrow again (or use another facility) to gather cash to invest into shares id prefer that one....

    if my offset interest rate is 7.5% (and this money would be non deductible) i could have an interest rate of 10.94% (at a 31.5% tax rate) which at the end of the day would cost me the same amount (after tax)... so if i can find somewhere i can borrow money from at less than 10.94% i would end up being in front...

    i dont want to pay money directly into the home loan account and redraw it as the house will soon be ending up a IP and this will take away from that deduction...
     
    DaveA__, 26th Apr, 2007
    #3
  4. Simon

    Simon Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    507
    Location:
    Newcastle
    If you are redrawing the funds for shares then it will be deductible - even whilst your PPOR.

    Can you keep YOUR money in the offset and topup the loan to 80%+ of valuation?

    The topup will be deductible as soon as it is spent on shares and the rest becomes deductible when the PPOR becomes an IP. At this time you can pull your funds from the offset to increase the deductible debt and keep YOUR funds for the next PPOR or any other personal use.

    Makes sense?
     
    Simon, 26th Apr, 2007
    #4
  5. DaveA__

    DaveA__ Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    580
    Location:
    Sydney, NSW
    yes but if i pay into the loan my over all position will be the same once its an IP

    Loan - 200k
    pay back 20k
    redraw 20k for shares

    Loan Left for used for property 180k
    loan used for shares 20k
    overall deductible position 200k, same as if i never payed back into the loan....

    i would love to do this but unfortunately it will be my first property and will already be at a 95% LVR... if there was extra equity i agree this would be the best way...

    it sucks starting off :(
     
    DaveA__, 26th Apr, 2007
    #5