Hello, long time lurker here, I have been running some numbers on this thing and wanted to share... I was originally excited by the prospect, but now not so sure. The idea with equity builder is that you can borrow for (certain, reliable) shares at a much higher LVR than usually granted with shares, without the risk of a margin call (max = 75% LVR for AFIC, Argo and MLT), and (at least for now) 2% cheaper than the normal margin rate. This is massively appealing at first because the main advantage that property has over shares is the greater ability to leverage and the lower interest on that leverage; this would level the playing field. The catch is the loan is P&I, which means a) you can't hold as large an asset pool for a given level of serviceability, and b) you have a fat wad of non-deductible payments to go along with your deductible interest. Some basic numbers to see the effects in terms of portfolio development *if you already have some equity*. Scenario 1: 300k equity in PPOR converted to LOC at 5%, which is used to buy some stable LICs with dividend reinvestment giving growth of 10% pa. After 15 years you've paid 15k pa interest for a total of 225k (with associated deductions), but now your portfolio is worth 1.25m (yay). Less the loan, equity is 0.95m. Scenario 2: Let's say the above was the limit of serviceability you are comfortable with (and for some reason this doesn't change for 15 years -- hey it's just the back of the napkin here). So you are willing to pay 15k pa. With NAB Equity Builder (NABEB?) you pay off principal steadily, if loan term is 15 years (the max) and payments 15k pa, their calculator has you at a loan of 158k. After the 15 years at 10% the portfolio is worth only 660k, albeit owned outright. So the assets you get to sit on are much less if at your servicing limit. In this example the equity is 44% higher the first way, as you were able to borrow more. It should be noted, I think NAB will actually let you borrow against this equity if you use their Builder product, ie not as a margin loan -- not 100% on this, but this would give you some ability to "snowball", ie build equity exponentially. Scenario 3: Interest paid in Scenario 2 was 67k total according to NAB calculator. If we wanted to compare things such that we pay equal interest in each scenario (same deductions), that would be a loan of about 531k. This is a bigger loan than was possible with the LOC. It corresponds to about 50k pa in P+I. Of course, portfolio ends up proportionally bigger at 2.2m. Scenario 4: What if we went for the max LVR of 75%, using LOC as 25% deposit? We would borrow a cool 1.2m, and pay 144k pa P&I. Final portfolio size is 5m, or 4 times better than Scenario 1. But serviceability is almost 10 times worse! Scenario 5: Finally, what's the annual damage if the investment is the same size as Scenario 1, ie 300k? NAB says about 28.5k, ie almost double the servicing requirements of Scenario 1, if you want to achieve that same portfolio size. So in summary, I started out thinking this product was almost too good to be true! Then I realised, it was =p If you already have some equity and want to buy shares, converting to an IO loan or LOC still seems like the way to go, unless you have a massive income burning a hole in your wallet. Property is still king for (serviceable) leverage it seems.