The Canstar Research Team analysed 12 margin loan products from 11 different providers and compared interest rates, fees and charges, loan-to-value ratio (LVR), the number of shares, exchange traded funds (ETFs) or managed funds available and other features offered such as loan repayment terms and switching options to determine the winners.
The team assessed margin loans across two consumer profiles: share investor and managed fund investor. The share investor profile is suited to a consumer who predominantly invests in the share market, while the managed funds investor profile fits someone who predominantly invests in managed funds through an advisor.
Following many hours of data-crunching, Canstar Research awarded 5-Star Ratings to margin loans offered by four margin loan providers – CommSec, Leveraged, nabtrade and Westpac (listed in alphabetical order).
5-Star Rated Margin Loans – 2019
|Company Name||Product Name||Consumer Profile|
|CommSec||Margin Loan||Managed Fund Investor|
|Leveraged||Direct Investment Loan||Share Investor|
|nabtrade||Margin Loan||Managed Fund Investor, Share Investor|
|Westpac||Online Investing Loan||Managed Fund Investor, Share Investor|
So, what made these 5-Star Rated margin loans stand out from others in the market?
5-Star Rated Margin Loans Star Ratings for 2018
CommSec – Margin Loan
CommSec’s Margin Loan was awarded 5-Stars in the Managed Fund Investor consumer profile for the second consecutive year.
It leads the pack when it comes to product features, such as its online capabilities in its margin loan application process and direct client service that include frequent loan statements, helpline availability, the option to get a personal account manager and the ability to view historical transactions.
CommSec’s Margin Loan also provides the greatest number of diversified and undiversified shares compared to other providers considered in these ratings.
Consumers who want to start small may be attracted to this loan having no requirements for a minimum loan amount.
Leveraged – Direct Investment Loan
Leveraged’s Direct Investment Loan was awarded 5-Stars in the share investor consumer profile, primarily due to competitively low fixed and variable interest rates.
This loan is now the market leader for one-year fixed rates across loan amounts of $50,000, $250,000 and $500,000, following a reduction to its interest rate compared to the previous year. Leveraged’s one-year fixed rates for those loans are now 1.5% more affordable than the market average.
This loan has no minimum drawdowns, repayments or loan amount. The Canstar Research Team also awarded points to this product for having no application or establishment fees in order for consumers to take out a margin loan.
It is worth noting that Leveraged does not currently offer managed funds as part of its margin loans, so this product is likely to be better suited to borrowers who prefer to invest in shares.
nabtrade – Margin Loan
nabtrade’s Margin Loan was awarded 5-Stars for both the managed fund investor and share investor consumer profiles.
It offers a combination of low interest rates that are within the top quartile of the market for one-year fixed and variable rates.
Canstar’s Research Team found nabtrade’s loan has no ongoing service fees and no minimum term of equity requirements. An equity requirement could mean that a customer would need to maintain equity of at least 25%, for example, or be hit with a margin call.
It also offers flexibility and choice of investment options for traders with over 1,700 approved funds available.
Westpac – Online Investing Loan
Westpac’s Online Investing Loan was awarded 5-Stars in both the managed fund investor and share investor consumer profiles.
This loan is the price leader for the fourth consecutive year, offering the lowest variable and fixed interest rates to investors.
Canstar’s Research Team found notable features included no application, transaction or establishment fees for the Online Investing Loan. It also has loan-to-value ratios (LVRs) of up to 75% depending on which type of stock or security being held, although it’s important to be mindful of the potential risks that could come with higher-LVR margin loans.
For more information about the 2019 Margin Loans Star Ratings and how they are calculated, please view the ratings methodology.