Gearing is borrowing money for the purpose of investing. By adding borrowed funds to your own, you can increase your total amount available for investment. Australians have historically geared into property via a mortgage. Investors can also gear into the sharemarket as a way of having more funds to invest.
Fixing and prepaying interest
Fixing and prepaying the interest on your loan can be an effective strategy in an increasing or uncertain rate environment. A fixed and prepaid loan can assist you in managing your expenses and cash flows, along with tax planning.
Margin Loans explained
A Margin Loan allows you to borrow to invest in growth assets, such as shares and managed funds, meaning you can increase your investment opportunities more than if you using only your own funds. Borrowing additional money to invest increases your exposure to an investment, enhancing your profits and potential dividends earned if the portfolio rises.
Margin Loan calculator
ASIC's MoneySmart margin loan calculator helps you work out how the amount you borrow could affect your potential gains and losses, the risk of a margin call and how much money would you need to meet a margin call if markets go down.
See how your savings can grow with our savings simulator. Enter your savings target and time frame, and see how different investment options accelerate how quickly you could reach your savings goal.
The power of regular investing
If you’ve got big life goals like buying a house, furthering your education, travel and retiring comfortably, you’ll need a plan to make sure you have the money you need, when you need it.