Margin Loans Lenders that treat margin loans favourable for servicing purpose

I have a margin loan which is fixed rate interest only and I have paid the interest in advance. It is secured against ETFs with a conservative 50% gearing. However St George bank is treating this as an overdraft (like a credit card) and this is seriously limiting my serviceability and hence borrowing power.

Are there other mainstream lenders that will treat margin loan favourably as it is secured against shares. My trading history can show I have held the shares over 3 years and didn’t sell any during the time.

A secondary question is I am in a new job, just past probation, where I have a variable component (commission) in the salary. I have max commission figure and the real amount received in the last 7 payslips. Which bank will look at the commission portion more favourably. Will it be based on history or they take a percentage of the max commission.

if it helps I am looking to borrow for a new ppor, current ppor will become investment property. I want cheapest variable rate with 100% offset.

 

speak to a broker about using CBA

 

Some lenders won't even include the margin loan on their serviceability calculations (no income used from the investment either though)
Suggest you speak to a good mortgage broker to get some specific advice.
If, by the sounds of it, your priority is lender policy regarding commission income and treatment of existing margin lending for maximum serviceability don't be surprised if you don't get the absolute cheapest variable rate on the market.

 

If you are reliant on dividend income from those shares attached to margin loan, a responsible lender would include the margin loan.

 

I believe cba won't include it if you don't use the dividends.

Firstmac will take the interest only repayments

Boq/virgin- calculated over 30 years P&I

 

Thanks. A naughty question. What if I don’t declare the margin loan, it is not shown in credit reports. Also I agree my broker is clueless. I can’t change now as my loan is already submitted, but I am looking for a better broker who has experience beyond vanilla scenarios. I am in Melbourne looking to buy new ppor in SE Qld.

 

The dividend is mostly reinvested in DRP and the amount is less than $4K. I won’t include it in my income.

 

You should declare/disclose any and all current liabilities

 

You being naughty could get your loan rejected, even just before settlement.

 

That is tax avoidance as well. DRPs are assesable income that is used to buy more shares. A diligent lender would ask why no income is declared.

 

I of course declare the dividends to ATO. But do I need to include the meagre income when applying for the home loan. I want to get the loan based on my salary income only.

 

If you use a lender that excludes the Margin Loan then no.

 

No wouldn't bother mate. Brokers/bankers wouldn't even know how to assess the MGL liability anyway...