Margin lending

Margin lending allows your clients to enhance their potential for wealth creation by making larger investments than would be possible using just their own funds. Having more money to invest can help your clients achieve greater diversification and potentially higher returns.

Key features

  • Borrow to invest

    By using existing cash, shares or managed funds as security for your client's loan.

  • Diversify your portfolio

    Choose from a competitive list of over 2,100 shares and managed funds with LVRs between 35% - 75%.

  • Potential tax benefits

    Margin lending can be tax effective and interest paid on a margin loan is generally tax-deductible.

  • Flexible loan structure

    There are no transaction limits, no minimum amounts for cash advances, loan draw-downs or repayments.

  • Apply for a BT Margin Loan

  • Apply as a Wholesale Client

Who is this for?

To be eligible for a margin loan, the applicant must be able to fund the obligations under the loan including any interest, fees and charges. The borrower should have an understanding of how the margin loan works and the ability to withstand economic cycles and market volatility.

  • An individual or joint individuals, who are over 18 years of age and an Australian resident for tax purposes; or
  • An Australian company; or
  • An Australian company or individual trustee of a family, discretionary or testamentary trust. Charitable, estate, unit trusts and Self Managed Super Funds (SMSFs) are not eligible for BT Margin Lending.

Under the Corporations Act BT Margin Lending must conduct an unsuitability assessment of each retail applicant for a BT Margin Loan.

Key benefits for your client

Tax effectiveness

Margin lending can be tax effective and interest paid on a margin loan is generally tax-deductible. Interest can be paid up to 12 months in advance and clients may be able to get an additional tax deduction for the prepaid interest in the current financial year (subject to your ability to satisfy the tax prepayment rules).

Borrow against an existing portfolio

By borrowing against a client's existing portfolio, the client increase the size of investment without having to sell their existing portfolio and potentially create a capital gains tax event.

Maximise wealth creation for your clients

Margin Lending allows your clients to enhance their potential for wealth creation by making larger investments than would be possible using their own funds and increasing their potential returns.

Enhance returns with a margin loan

For investors looking to increase yield, combining high dividend yielding investments with conservative levels of gearing may enable investors to construct positively geared investments where dividends are used to offset interest costs on the loan amount.

Associated risks

All investments are subject to risk. Some of the main risks associated with taking out a margin loan include:

  • There is the potential to magnify losses if the value of the investment falls.
  • The value of securities may not go up, or if they go up, the increase in value may not be sufficient to cover the costs of the investment.
  • Clients may be required to repay all or part of the margin loan in the event of a margin call or default.
  • If money is borrowed from another source to provide equity for the margin loan, this will increase the overall gearing level. The higher the overall gearing level, the greater the effect that a fall in the value of your securities will have on your client’s financial situation.

What are the approved securities for investors?

What are the fees and charges?

BT Margin Lending offers both variable and fixed interest rates. Interest rates are reviewed monthly and subject to change. See the current variable and fixed interest rates.

See the current variable and fixed interests rates.

Loan to Value Ratios (LVR)

BT offers LVRs on over 2,100 shares and managed funds with LVRs between 35% - 75% (view approved securities). We determine what the LVR is for each security, and may change it at any time, including reducing it to zero. The maximum amount of money that your client may borrow will also depend on:

  • The credit limit we provide following our assessment of their current financial position
  • How much money and/or securities they contribute
  • Which shares, managed funds or other securities they want to invest in

Regular Gearing Plan

  • Available with Standard BT Margin Loan and BT Margin Lending Online Loan
  • Minimum loan is $2,500
  • Minimum initial investment $1,000 per managed fund
  • Minimum monthly loan advance $250
  • Minimum monthly investment of $250 per managed fund

Wholesale Clients

Investors can qualify as a Wholesale Client if they can provide us with a copy of a certificate issued by a qualified accountant (as defined in the Corporations Act) that states that they:

  • Have net assets of at least AUD2.5million; or
  • Have a gross income for each of the last two financial years of at least AUD250,000 a year

Other details for Wholesale Clients:

  • Wholesale Clients may apply for credit limits from AUD500,000 up to AUD5million
  • Single stock concentration cannot exceed 50% of the total eligible portfolio
  • The total borrowing across the Westpac Group including this loan must not exceed AUD10million
  • The Accountant's Certificate needs to be updated every two years

Client options

  • Standard BT Margin Loan
  • Minimum loan is $20,000
  • No minimum requirement for cash advances or loan draw-downs
  • No minimum amount for loan repayments
  • Cash advances for investment purposes
  • Extensive list of approved securities
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