Margin Lending Explained

A Margin Loan is money borrowed from the bank to invest in Shares and Managed Funds.

As an investment strategy, a margin loan can be a successful way to grow your wealth.

Margin Lending Explained
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A Margin Loan can expose you to a range of taxation benefits, and the added security of diversifying your investment portfolio. But, with additional exposure to the share market – the basis for investing in shares and managed funds - there comes an additional level of risk.

Want to know more? Try our Margin Lending Made Easy Brochure. Ready to put your money to work? Call us on 1800 805 972 or email to find out more.

A Margin Loan is money borrowed against the security in your investment portfolio – approved shares, managed funds, and savings – used specifically for investing in shares or managed fund units.

A Margin Loan can magnify not only the gains in your portfolio, but also the losses. It’s important to make yourself aware of what the risks are, and whether investing with a Margin Loan suits your financial position.

A Suncorp Bank Margin Loan may be used to borrow against any security that appears on either of the following Acceptable Securities lists: Shares ListManaged Funds List to invest in any share or managed fund of your choice.

At Suncorp Bank, we believe in helping you, step-by-step through your Margin Loan experience to achieve your investment goals.


Getting started

When you take out a Margin Loan, Suncorp Bank will award you a Credit Limit, which is the maximum amount we will lend you based on a number of factors including your financial situation and credit assessment at the time of your application.

  • After we’ve determined your credit limit, you’ll then be nominated a Borrowing Limit¸ which is a figure directly proportional to the quality and quantity of security in your portfolio.


How your Borrowing Limit is assessed:

Your Borrowing Limit is assessed according to the value of the securities in your portfolio, multiplied by their nominated Loan to Value Ratio (LVR). The list of acceptable securities (shares or managed funds), and their each respective LVR percentages are detailed in the following links:

A Suncorp Bank Margin Loan can be used to invest in any ASX listed share or managed fund, but we will only lend against those in the above lists.


An example of how Credit and Borrowing Limits work together:

John has $100,000 worth of shares in a company. As outlined in the acceptable securities list, the maximum Loan to Value Ratio on that share is 40%.

John can borrow an additional $40, 000 (40% of $100, 000) to purchase more of those shares, provided that the sum of $40, 000 doesn’t exceed his credit limit.

Want to know more? Try our Margin Lending Made Easy brochure.

Case Study

A case study

Take a look at the following example to see the idealised potential of a Margin Loan.



Without a Margin Loan

With a Margin Loan

(At 50% Loan to Value ratio)

With a Margin Loan

(At 75% Loan to Value ratio)

Initial Equity

 $50, 000

  $50, 000

  $50, 000


(Loan amount)


  $50, 000

  $150, 000


(the capital you invest)

  $50, 000

  $100, 000

  $200, 000

Portfolio Growth

 20% ($10, 000)

 20% ($20, 000)

 20% ($40, 000)

Portfolio Value

(Growth + Invested Sum)

 $60, 000

 $120, 000

 $240, 000


 $5, 000

 $6, 000

 $12, 000


(8% p.a.)


 - $4, 000

 - $12, 000

Equity after 1 year

 $63, 000

 $72, 000

 $120, 000

Return on Equity




This example assumes a 1 year investment timeframe, 20% growth, 5% annual dividend yield paid at the end of the year and an interest rate of 8% p.a.. These assumptions may not be indicative of actual market rates or timing. This example does not take into account tax implications or your personal situation.  We recommend you speak to your financial and/or tax adviser about how a margin loan may affect your financial position.

Want to know more? Try our Margin Lending Made Easy brochure.

Earning Interest

The benefits

A margin loan has the potential to:

Minimise your tax

  • Interest paid on your account is generally tax deductible (in the year you pay it), lowering your assessable income and tax payable.

  • You may also receive franking credits attached to the dividends on the shares in your portfolio.

  • You may reduce or delay capital gains tax payable. By requesting a loan advance if you need to access capital for business or investment purposes, you can avoid selling your shares which may trigger a capital gains tax liability. It should be notes that any loan request would be subject to our normal credit assessment criteria and loan terms and conditions at the time.


Generate more income

  • Margin loans may be used to increase your income. If you are an active investor and you profit from buying and selling shares, a margin loan allows you to invest more and potentially increase your investment returns. If you are a passive investor, a larger portfolio may increase your entitlement to dividends and dividend income each year. 


Diversify your portfolio and lower your risk

  • With a larger pool of funds to invest, you can spread your investments across a wider range of investments. This may reduce the impact individual stock fluctuations have on your overall portfolio.


Grow your wealth faster

  • Using your margin loan to buy more shares when prices are rising may enable you to capitalise on growth markets and build you wealth faster.

Other Information

Because a margin loan facility uses debt to supplement your equity contributions, any movement in the value of your portfolio is magnified. In a rising market, this will mean larger gains, and in a falling market: larger losses.

It’s important to speak to your Tax and Financial Advisers about how a margin loan may affect your financial position.

Did you know? If you combine your Suncorp Bank Margin Loan with Suncorp’s powerful Share Trade platform, you have the power to buy and sell shares and manage your margin loan all in one convenient place, offering you a seamless investing experience. 


The risks

Though the complete details on the risks of a margin loan are set out in the Suncorp Bank Margin Loan Product Disclosure, in brief, some of the potential risks are as follows:

Loss of Equity

  • In a falling market it’s possible that you could lose some or even all of your equity.

  • If you lose more than the equity you originally invested, you’ll be required to repay any outstanding loan balance.


Margin Calls

  • Margin Calls occur when your current loan balance exceeds your borrowing limit.

  • Though Suncorp offers a buffer of 5% for shares, and 10% for managed funds, if you don’t act immediately to rectify your margin call status, we may start selling security on your behalf to return your portfolio to within your account’s designated limits. It’s up to you to closely monitor your account.

  • To rectify a margin call you may:

  • Deposit more security

  • Pay down your loan with cash, or;

  • Sell security to cover the margin call.


Exceeding Your Credit Limit

  • In accordance with our credit assessment, your credit limit is the maximum loan balance that we assess as suitable for your financial position.

  • If you attempt to trade in excess of this, we may not settle any trades, and you may be liable for late settlement and other charges.

  • If you breach your Credit Limit, you will be required to reduce the balance of your loan to below your Credit Limit within 5 days or your account may enter margin call.


Interest Rate Changes

  • While fixed rates will remain the same over your agreed term, your variable interest expenses may increase, and may exceed the returns on your investments.

  • Increases may change your interest expense, which may in turn cause you to exceed your credit limit, in which case, you have 5 days to reduce your loan balance.


The margin loan referred to on this website is provided by Suncorp-Metway Limited ABN 66 010 831 722 (Suncorp Bank).

The information provided is of a general nature and has been prepared without taking into account a particular customer's objectives, financial situation or needs. Before acting on this information a customer should consider its appropriateness relative to the customer's objectives, financial situation and needs.

Past performance is not a guide to future performance.

You must read the relevant Product Disclosure Statement for the Suncorp Bank margin loan product before you make any decision regarding this product.

The Suncorp Bank margin loan is also subject to standard terms and conditions that can be viewed here.  

Terms used on this website that are defined in the margin loan Product Disclosure Statement or the standard terms and conditions for the Suncorp Bank margin loan have the same meaning when used on this website.  

You should seek advice from your tax adviser, accountant and financial adviser in relation to your particular circumstances and the financial and tax implications of the Suncorp Bank margin loan product.

Suncorp Share Trade is a service provided by CMC Markets Stockbroking Limited ABN 69 081 002 851 AFSL No. 246381, a Participant of the ASX Group (“CMC Markets Stockbroking”) at the request of Suncorp-Metway Ltd ABN 66 010 831 722, AFSL 229882 (“Suncorp”). For a copy of the terms and conditions relating to the Suncorp Share Trade service and the Financial Services Guides for CMC Markets Stockbroking or Suncorp (or other relevant disclosure documents), contact us on 1300 156 299 or via email at Neither CMC Markets Stockbroking nor Suncorp are representatives of each other. To the extent permitted by law, Suncorp will not guarantee or otherwise support CMC Markets Stockbroking’s obligations under the contracts or agreements connected with the Suncorp Share Trade service.