Hints for comparing margin lenders

Margin lenders let you boost the size of your share portfolio by lending you the money to do it. For their trouble they'll charge you interest at either a fixed or variable interest rate.

Variable rate margin loans are more flexible and forgiving than their fixed cousins and for this reason many investors have a soft spot for them. For example, it usually doesn't cost anything to pull out of a variable rate loan, whereas fixed rate loans can attract penalty fees upon exit. Check out the list of variable rate loans compared across the rates, LVRs (go to the ABC of Margin Lending for the lowdown on LVRs) and other important features such as whether instalment gearing is offered.

If you like the idea of locking in an interest rate over a specific period - so future rate rises lose their bite - then fixed rate loans might be the way to go. Fixed rate loans are also favoured by investors who like to pre-pay 12 months interest upfront for a fast tax deduction before the end of the tax year.