What types of facilities are available to borrow money to use for share trading/investing? Do I need to give property equity, or will the shares be sufficient as collateral? What is the cheapest option to ensure the greatest overall result back to me?
There are facilities to use either property or shares but unfortunately this is not a forum to give advice that is tailored for anyone in particular.
I would encourage you to speak to a Financial adviser not only to determine the best lending strategy but also to discuss your investments methodology during this volatile world markets period.
From a borrowing perspective there are a number of ways in which you can access funds to invest in a share portfolio.
· If you have available equity in a property or funds available in the redraw of your home loan then you can use the funds to invest. Whilst the interest rate may be lower than other funding options you need to be aware that any additional borrowing against a property will limit your ability to access funds for other purposes you may be thinking about in the future.
· You could do some research on margin loans where you are able to borrow money to invest and the shares or managed funds are taken as security. The interest rate on the margin loan may well be higher than a home loan however it might provide you with other benefits depending on your investment goals.
Here is a link that explains margin loans in more detail - https://www.moneysmart.gov.au/investing/borrowing-to-invest/margin-loans
· Another option maybe obtaining a personal loan.
I would highly recommended making contact with a qualified financial adviser who can sit down with you, understand your goals and aspirations and then develop and tailor some options for you to consider. It is also advisable to seek a seek a 2nd opinion.
If you are unsure of how to find a qualified financial adviser here are some links that might help
I hope this helps, best wishes
Hi John, from a broad lending view both are securities acceptable to lend against (shares outside of margin lending is more of a niche). Subject to individual lending policies. Like anything the cheapest option is not always the best option for your situation. I suggest you sit down and discuss in more detail with a professional you are comfortable with.