Do you think that the yield of the margin loans will remain lower than the mortgages? The benefit of the mortgages is that it’s clearly regulated. Not sure if that is the case also for the margin loans? Has somebody actually tried a big margin loan over a longer period?
Against the whole portfolio, if you want to put it this way. If you are on RegT margin, you are fine as long as your net equity (stocks value + negative cash balance + eventually positive cash balance in another currency) is higher than 50% of your stocks value. I always think that borrowing up to 25% of your current portfolio value is fine: as long as your stock positions don’t fall by more than 50%, your margin requirements are fulfilled.
Margin interest rates seem to be slightly higher than mortgage interest rates, even at IBKR. For the first CHF 90k, margin interest is reference rate + 1.5%, for 90k-900k it’s +1.0%, for >900k it’s +0.75%. SARON mortgages are available for reference rate + 0.6%-0.8%, as far as I know.
I don’t expect these rate premiums to change often.
For some reason, IBKR’s reference rate is currently -0.33%, though, despite SARON being at -0.20% and IBKR claiming their CHF reference rate to be SARON.
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That’s also possible with VIAC, at a better rate - if you have sufficient money in pillars 2 and 3a.
By pledging it. 20 characters
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I’ve just took out 20k CHF to pay the taxes, which will be automatically re-payed in the next 4 month with my monthly investment money. Had it the next business day in the CHF bank.
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Lets assume I have 100k in VT at IBKR and a 0 cash position.
If I take out 25k:
100k VT
-25k cash
Market now crashes by 50%:
50k VT
-25k cash
As RetT margin requirement is 50% overnight, I’m at the limit here? No further correction allowed? Despite still having 25k net?
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That’s how I count it.
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I’m not sure that’s how RegT works actually.
Here’s how it works, IIRC:
- The 50% overnight is at the end of the purchase day, it’s the “initial” margin.
- From the second day onwards, the maintenance requirement is 25% (at least for long stock positions).
If you were allowed to buy up to 50%, and the maintenance requirement was 50%, any decrease in portfolio value would cause a margin call. The difference between the 50% and the 25% allows for some leeway.
The comment on this post explains it. But I’m not an expert, so I’m happy to be corrected if I’m wrong.
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Not a specialist either, but I had a look at it.
Initial margin is a requirement to open a position, overnight is to keep it overnight 
During the day. IB applies RegT requirements overnight. If you are on RegT margin.
At the end of the trading day, IB applies the Regulation T initial margin requirement.
And as always I am happy to be corrected.
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Ok this is where it’s really confusing. If you look at IBKR’s website, it is actually… “Reg T End of Day Initial Margin”. That’s why I looked into it and found stuff that support my interpretation… but I’m not sure 
Nice idea! Might do the same, I save in a separate pot in my bank, no interest (IB would give me about 1% currently), so will at a minimum, save that amount into IB and get the 1% interest. But, might try investing that and use Margin to withdraw and pay for my taxes.
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I’m not sure to understand what you want to do, but at the moment CHF interest rates at IB are 0% up to 50k, and negative above that amount
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I meant convert to USD. Obviously lose in tansaction costs and currency risk
That’s some very substantial risk, considering the interest rate differential is >1% afaik.
Not a bet I’d take with my tax money…or any other money for that matter
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How exactly did you do that? Did you just make a wire transfer to your bank account for a CHF amount greater than your cash balance?
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Yes, it works like that
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Yeah, I was just not sure whether you need to like configure a margin loan somehow or if it is just as easy as transferring money and creatimg a negative position.
Yes with a margin account you will see two lines: amount available on margin & amount available in cash. IBKR then let’s you take out up to the amount available on margin. After the transfer the balance of the currency you take out goes negative.
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