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Margin Loan Rates <1.50% @ Interactive Brokers

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Margin Loan Rates <1.50% @ Interactive Brokers
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mrvaluepack on 07/04/2021 - 21:16 interactivebrokers.com.au (1239 clicks)
Last edited 08/04/2021 - 12:33 by 2 other users

Was watching Meet Kevin where he revealed his margin rate near the end of the video and I was blown away.

Started searching immediately and found IB is currently offering near to what Kevin was saying.

This is a deal if you compare it to our local aussie banks who are offering margin loan rates of ~5.5%.

Cheap money!!!

NOTE: For clients of IBKR Australia that are either natural person clients, or non-natural person retail clients, an additional spread will be added to the rates below, being 1% for borrows in AUD, 2% on all other borrowings. Click here for more information.

Please see Borrowing to Invest and seek financial advice before you take out a margin loan.

Referral Links

Referral: random (213)

Referrer gets $200. Referee gets $1 worth of IKBR share (capped at $1,000) for every $100 deposited.

Financial Loan

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Interactive Brokers Australia
Interactive Brokers Australia

closed Comments

  • ruskiromka on 07/04/2021 - 21:19

    Been using this for year! SO GOOD!

    • mrvaluepack on 07/04/2021 - 21:40

      My main brokerage account is currently with Selfwealth but I'm going transition some over to take advantage of this low rate.

      How do you find IB so far? Any issues?

      • jjcf on 07/04/2021 - 22:16
        +1

        I’ve been with them for over a decade.

        It really depends what you are trying to do, and what your experience is. the tldr is that if you want simple and easy and support, it’s probably not right for you.

        Their web client is very limited, but it’s fine if you are just looking to buy and sell a couple shares that you plan on holding.

        Their desktop client is very powerful, but an absolute 1980s shitshow.

        Depending on how often you transact and how you go about it, you may have to pay for data feeds for your exchange(s) of choice.

        You won’t find better execution or cheaper brokerage.

        • hanofee on 07/04/2021 - 22:20

          Agree, their interface is far from simple. If ur a seasoned trader then it's a good platform. But if u expect something close to SW, this is far far far from it. Their web client crashed a lot too, I normally use their mobile app or desktop client.

          • jjcf on 07/04/2021 - 22:21

            @hanofee: The web client crashes, whereas TWS just dumps it’s connection constantly.

          • mrvaluepack on 07/04/2021 - 22:27

            @hanofee: Thanks for the feedback, I've used bell direct & cmc stockbroking before as well. Would that be something similar?

            All I want to do is use their cheap rates to buy some etfs and hold.

            • hanofee on 07/04/2021 - 22:37
              +1

              @mrvaluepack: I never tried Bell or CMC unfortunately. Tried Commsec, SW, OpenTrader, IG, and I found this is really quite complex with so many features on it compare to others. I ended up using it only for US market as I still prefer Chess system for ASX for personal reason.

            • gunslinger on 08/04/2021 - 07:20

              @mrvaluepack: Buy and hold etfs it will be just fine.
              Edit, per above, it's not a chess system (they hold your shares).

            • Asx10000 on 08/04/2021 - 09:42

              @mrvaluepack: Then you would want to check out Superhero. Perfect for you. The cheapest I believe.

  • Roe-Jogan on 07/04/2021 - 21:25

    what is this? can someone explain this in a simple sentence for a noob plz

    • ATangk on 07/04/2021 - 21:33
      +13

      You want to buy stocks with money you dont have?

      • Roe-Jogan on 07/04/2021 - 21:45
        +1

        aha and if somehow the stock tanks, what happens?

    • mrvaluepack on 07/04/2021 - 21:41
      +1

      Its like a home loan but its for stocks/shares/options/etfs instead.

  • mynameisborat on 07/04/2021 - 21:48
    +3

    This is gold ! I didn't know about this. Thanks OP.

  • bruceclipse on 07/04/2021 - 21:56

    margin call…tits up.. and then loose it all great…

  • watwatwat on 07/04/2021 - 21:58
    +1

    It's actually 2.5% and limited to $25k in Australia.

    If anyone is signing up, don't forget to use a referral link and get up to $1000 USD worth of IB shares for free on deposits of up to $100k.

    • hanofee on 07/04/2021 - 22:04

      Yeah, why the random referral system not appearing on this one?

    • bobbieb on 29/04/2021 - 11:09

      Hmm… I wish that I'd seen this before spending four weeks going through their abysmal application process.

      All for a $25k limit. Hmmm.

    • Duram on 18/05/2021 - 11:24

      I'd rather go 3.75 via nab equity builder.

  • pipe on 07/04/2021 - 22:18
    +1

    Joined 12 years ago when Commsec and Etrade were charging $25 per order to buy / sell shares and interactive brokers were charging $2.50.

    Happy to answer questions.

    • watwatwat on 07/04/2021 - 22:19

      Joined 12 years ago

      Did you get rich on margin?

      • pipe on 07/04/2021 - 22:24
        +4

        No, I did not get rich.

        The margins and low brokerage fees and being able to trade 24 hours a day on world markets and after hours trading got me doing a lot of short term trades which in the long run did not benefit my bottom line compared to just buying the index and holding.

        • hanofee on 07/04/2021 - 22:26

          Well, at least u saved a lot on fees :)

          • stockastics on 07/04/2021 - 22:45
            +1

            @hanofee: Nope, he lost money on fees as well as he traded often

      • thirtysixd on 09/04/2021 - 09:42

        Would not recommend for weekend punters but low margin fees makes market neutral or low vol strategies viable

  • Aerith-Waifu on 07/04/2021 - 23:44

    does getting a margin loan affect your credit rating? also, what income you need? whats the minimum and maxing you need to apply for?

    • mrvaluepack on 07/04/2021 - 23:50

      Yes, it does.

      From IB:

      All retail natural person clients must meet specific financial thresholds in order to be granted a margin account, specifically income must be greater than AUD $40,000 or Liquid net worth must be greater than AUD $100,000. In addition, IBKR Australia is obliged to verify that the information concerning the client’s financial situation that was collected during the application is accurate and complete. If the verified information concerning the client’s financial situation does not meet the thresholds stated above and/or are not comparable to the financials declared by the client during the application, the client will not be granted margin. However, if the client has a valid and recent Statement of Advice (“SOA”) from their registered financial advisor or financial planner that recommends that the client can be issued a margin lending facility and that SOA is made available to IBKR Australia, this additional verification of the client’s personal financial position will not be required.

  • batrarobin on 07/04/2021 - 23:59

    If the sh*t hits the fan, what do they use as collateral?

    • john_conner on 08/04/2021 - 00:14
      +4

      They sell the shares you’ve bought on margin before your account hits zero.
      So you lose all your capital and don’t own any shares.

      • mrtin on 08/04/2021 - 08:12

        What also tends to happen before them selling your shares is ppl contribute money into it, and contribute money into it, then s really hits the fan and the client ends up losing the original capital plus extra.

  • Super8Tab on 08/04/2021 - 08:08

    Do we have a referral thread for IBKR? Interested in joining to get covered calls

  • leetguy101 on 08/04/2021 - 08:57

    CHESSN?

    • hanofee on 08/04/2021 - 10:15
      +1

      No Chess. It's custodian system where they hold your shares. For US market, doesn't matter though, all of them hold your shares, including Commsec, as there's no such system overthere.

  • thirtysixd on 09/04/2021 - 09:44

    Is not being ripped off by big banks really a deal?

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