Who can open an account?
How much can I borrow?
Can I transfer my existing Margin Loan to Macquarie?
Can I use a third party's portfolio as security?
How many shares can I include in my portfolio?
What is the loan-to-value ratio?
What is a margin call?
What happens when a margin call is made?
What is a buffer zone?
How can I avoid margin calls?
Who do I call if I want to buy and sell shares?
What are the interest payments and how are they calculated?
Can I write call options?
Who can open an account?
Individuals, partnerships, companies and trusts.
How much can I borrow?
For a Macquarie Margin Loan you can borrow $20,000 or more depending on your credit limit. For Macquarie Instalment Gearing the minimum loan amount is $2,000 initially then $500 per month.
To calculate your borrowing capacity use the calculators on this site.
Can I transfer my existing Margin Loan to Macquarie?
Yes. Simply complete section twelve on the Macquarie Margin Loan Application for Finance.
Can I use a third party's portfolio as security?
Yes, and we will ask for a mortgage and guarantee for your investment. You also pay a fee of $50.00 to set up a third party account.
How many shares can I include in my portfolio?
There is no minimum or maximum number of shares you can include.
What is the loan-to-value ratio?
The percentage of the market value of a share or managed fund that Macquarie will lend you. For example, if ANZ shares have a 70% loan-to-value ratio, Macquarie will lend you $7.00 out of every $10.00 you want to invest in ANZ shares.
What is a margin call?
A margin call will be made if your equity (the value of the capital you contributed) falls below the agreed loan-to-value ratio. If this happens you must provide additional funds to restore your account to the minimum equity position. You are responsible for monitoring your loan for margin calls.
What happens when a margin call is made?
A margin call requires prompt action (usually by 2.00pm on the third business day after the margin call is issued).
To satisfy your margin call you have a number of options:
1. Sell shares or managed funds from your portfolio
You can sell securities from your portfolio and use the net proceeds to reduce your loan balance and therefore your current gearing level.
2. Cash from your bank account
You can provide cash in order to reduce your loan balance and hence your current gearing level by 2pm on the day your margin call is due.
3. Additional shares and managed funds
You can provide additional shares or managed funds as security for your margin loan or "switch" into a managed fund that has a higher LVR.
4. Market Rally
Your margin call can be satisfied by a 'market rally'. This means that if your current gearing level is sufficiently reduced by a rally in the prices of shares in your portfolio, within the satisfaction timeframe, your margin call will be satisfied.
If you do not initiate one of these actions, the lender will act on your behalf - usually selling shares to reduce your loan.
What is a buffer zone?
The percentage that the loan balance can exceed the loan-to-value ratio before a margin call is made. It gives you breathing space by adding a buffer to help prevent margin calls due to small market movements.
The buffer zone for the Macquarie Margin Loan is 5.00% of your total portfolio value.
How can I avoid margin calls?
To help avoid margin calls:
- be conservative in the amount you borrow
- borrow less than your credit limit
- diversify your investments
- make interest payments regularly
- use your investment income to buy more shares or managed funds
- monitor your investments and your loan-to-value ratio closely.
Who do I call if I want to buy and sell shares?
Your adviser or Macquarie DirecTrade. If you use another broker Macquarie will settle your trade and your broker must forward a copy of the contract note to Macquarie.
What are the interest payments and how are they calculated?
Interest rates are advertised monthly and you can download the latest rates from this site. They are calculated on your daily account balance and charged monthly at the end of each month. You can also fix and prepay your interest for 12 months in May or June.
Can I write call options?
Yes. You can use your shares as security for your Macquarie Margin Loan and as option trading collateral. This may allow you to earn extra income from your shares. Ask your stockbroker or Macquarie for the relevant documentation to complete.
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