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Margin loan

a loan against your equity
similar to how a mortgage is a loan against your house
interest changes time to time

you can take out a margin loan against your portfolio, and buy a house
if you can’t pay it back you loose your portfolio but not the house.

Brain

  • 600k stocks, borrow 300k on margin (LTV 50)
  • move the debt from the margin loan to a mortgage
    • buy cash house, get unencumbered mortgage with bank against house to release e.g. 70% cash.
    • put back in stocks, now margin loan is more stable
  • how is this different from just putting 300k back in stocks?
    900k stock, 300 margin -> LTV 30
    there must be something that prevents you from increasing margin again.

also see box spread

  • article
  • another article on buying a house with margin loan through interactive brokers

investing
finance