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A Macquarie Margin Loan is simply a line of credit to buy shares where your portfolio is the only security required for the loan. By borrowing to invest in shares you have the potential to build wealth faster than if you only used your own funds to invest.
With a Macquarie Margin Loan you can:
- borrow funds in either NZ dollars or Australian dollars
- borrow to invest in a portfolio of New Zealand and Australian listed shares
- borrow between 35% and 80% of the value of approved shares
- use your existing portfolio as security
- use your spouse, company or trust's portfolio as third party security
- switch holdings within your portfolio at any time
- monitor your loan account and portfolio 24 hours a day via our secure online site
Product profile
| Minimum amount you can borrow |
$20,000 |
| Loan term |
There is no fixed loan term and thus no set time to repay your loan |
| Approved securities list |
Choose from over 65 New Zealand and 450 Australian shares |
| Loan to Value Ratio (LVR) |
New Zealand Shares - between 40% & 75%
Australian shares - between 35% & 80% |
| Competitive interest rates and payment options |
Current NZD standard variable interest rate: 11.45% p.a.
(capitalised to the loan monthly in arrears)
Current AUD standard variable interest rate: 10.70% p.a.
(capitalised to the loan monthly in arrears)
Indicative fixed interest rate available on request
(capitalised to the loan monthly in arrears)
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| Fees |
- Establishment fee: Nil
- Overnight direct bank deposits: Nil
- Third Party Security Fee: $50 (if set up after approval)
- Closure fees: Nil
- Custody fees apply
Break costs will be incurred if you pay all or part of the fixed interest rate component of your Margin Loan. Please see the Macquarie Margin Lending Brochure for full disclosure of fees.
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How a Macquarie Margin Loan works
Once your Margin Loan is approved:
- you borrow 35-80% of the value of New Zealand and Australian shares
- you contribute your own capital for the balance
- you invest the total amount in shares from the Macquarie securities list (pdf 36KB)
- your portfolio forms the security for the Margin Loan (or you can use an existing portfolio held by a third party)
Gearing with Contact Energy shares (11/05/00 to 11/05/05)
| |
Without gearing |
Gearing with Macquarie Margin Lending |
| Own Capital |
$50,000 |
$50,000 |
| Loan |
Nil |
$50,000 |
| Total Investment |
$50,000 |
$100,000 |
| Market Value on 11/05/05 |
$141,235 |
$282,470 |
| Dividends |
$29,809 |
$59,618 |
| Total Value on 11/05/05 |
$171,044 |
$342,088 |
| Borrowing Costs |
Nil |
$22,750 |
| Loan Repayment |
Nil |
$50,000 |
| Net Portfolio Value on 11/05/05 |
$171,044 |
$269,338 |
| Note: This refers only to capital growth and grossed up dividends including imputation credits, assuming annual pre-tax capitalised borrowing costs of 9.10%. Brokerage, stamp duty, and tax considerations on interest are not included. |
As at 11 May 2000, shares in Contact Energy had an adjusted value of $2.51 per share. As at 11 May 2005, the value of Contact Energy's shares had risen to $7.09 and total dividends of $1.50 per share were paid over the five year period. In this example, an investor using his or her own capital would have shares and earnings at that time worth $171,044.
An investor using gearing via a Macquarie Margin Loan would have shares and earnings at that time (after borrowing costs and loan repayment are taken into account but before any tax deductions or other benefits are included) worth $269,338.
Why use Macquarie Margin Lending?
You might use Macquarie Margin Lending if you:
- want to build a strong portfolio of shares, but don't have the necessary capital
- wish to accelerate your wealth creation by investing a combination of your own money and borrowed funds
- have an existing portfolio of shares and wish to use the additional funds to diversify your investments.
How to Apply
You can apply for a New Zealand Dollar Margin Loan or an Australian Dollar Margin Loan. Speak to your Financial Adviser or call Macquarie on 0800 407 198 to discuss which one is right for you.
The information above has been prepared by Macquarie Lending NZ Limited (Macquarie) and does not take account any of your objectives, financial situation or needs. Before acting on this general advice, you should consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.
Macquarie Lending NZ Limited is not an authorised deposit-taking institution for the purposes of the Banking Act (Cth) 1959, and Macquarie Lending NZ Limited's obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542. Macquarie Bank Limited does not guarantee or otherwise provide assurance in respect of the obligations of Macquarie Lending NZ Limited.
Macquarie Lending NZ Limited is a company incorporated in New Zealand and is not authorised to conduct banking business in any jurisdiction. Neither Macquarie Lending NZ Limited, nor any member of the Macquarie Bank Group are registered as a Registered Bank by the Reserve Bank of New Zealand under the Reserve Bank of New Zealand Act 1989.
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