Leverage with investment choice,
no margin calls.
More certainty
Eliminate the risks of a
margin call.
Predictable repayments
Principal and interest repayments available.
Greater diversity
Access a broad range of approved investment options.
NAB Equity Builder has been awarded the CANSTAR Innovation Excellence award in 2016.
Received by NAB Equity Lending April 2016
Use the power of leverage while avoiding margin calls
A 'no margin call' solution for investors with long-term goals.
Goal oriented investor looking for certainty
There are some financial goals that emerge with greater clarity; specifically when the size and timing of the financial target are both known. Such targets might include:
- House deposit
- School fees
- A non-concessional superannuation contribution, or
- Funds to supplement a lifestyle change – prior to authorised access to superannuation.
In the past, a margin loan may have been used for such a purpose, but if gearing levels are not managed carefully, an investor’s accumulated equity may be negatively impacted.
NAB Equity Builder can become a more stable place to accumulate equity, due to its no margin call structure, and the discipline of the regular principal repayment process. Equity is accumulated via additional contributions, progressively reducing both the gearing level, and the potential impact of negative market events closer to the target date.
There are risks associated with this product including falling prices, rising interest rates and falling returns. Find out more about the risks and benefits of a NAB Equity Builder below.
Use our calculator to simulate the monthly repayment obligations for different combinations of loan size and term.
"Mini mortgage" - geared exposure to growth assets
NAB Equity Builder recreates the home mortgage scenario, by replacing one indivisible growth asset with a divisible one; a managed exposure to the share market.
The important difference is that the investor can control the exact size of their investment. This enables the investor to customise the transaction to what they can afford; both deposit wise, and more importantly - from an ongoing repayment perspective.
The median house price for Australia pushed past $650,000 during 2015. This translates into both a substantial sum as an initial deposit, and more importantly- a significant repayment schedule over a long period of time. Even though many still aspire to the dream of home ownership, it is becoming increasingly difficult to attain.
The traditional home mortgage combines the following three elements:
- An investment into an asset with the potential for growth.
- The use of borrowed funds to create a larger exposure.
- A disciplined repayment schedule, which becomes a forced savings plan - as regular equity payments reduce the loan to zero in an agreed timeframe.
There are risks associated with this product including falling prices, rising interest rates and falling returns. Find out more about the risks and benefits of a NAB Equity Builder below.
Use our calculator to simulate the monthly repayment obligations for different combinations of loan size and term.
Looking for certainty
NAB Equity Builder now presents a gearing solution that many margin lending clients would have selected, if it was available when they first used borrowed funds to invest into managed funds. These clients would accept the commitment to steadily repay their loan in their choice of time frame, instead of the commitment to respond to a margin call – if one should occur.
Many current margin lending investors would prefer to completely remove the future possibility of a margin call, while still being able to use borrowed funds to invest into their preferred managed funds. NAB Equity Builder allows investors to:
- Access borrowed funds to invest into a wide range of managed investments
- Borrow up to 75% of the value of the investment
- Automate monthly repayments via direct debit
There are risks associated with this product including falling prices, rising interest rates and falling returns.
With NAB Equity Builder investors can refinance their existing margin loan into a more stable structure, with the same loan security.
Benefits of NAB Equity Builder
Greater control
NAB Equity Builder allows you to customise each loan program to suit your particular investment goals. You can select your preferred investments, starting loan amount, style of principal repayment, and time frame to repay the loan.
Greater stability
Price movements of the security supporting the loan will not trigger the need for any corrective action (ie the acceleration of loan repayments, or the sale of loan security); regardless of the value of the outstanding loan.
Increasing loans and diversity
Borrowing to invest can increase the return on your funds, when the investment outperforms the cost of borrowing. It can also allow you to increase your exposure to a preferred investment theme.
Lower borrowing costs
As the NAB Equity Builder loan program requires the consistent repayment of loan principal, the loan balance used to calculate loan interest is constantly decreasing.
Risks of NAB Equity Builder
Property may be sold
If you miss a monthly principal or interest payment it may trigger capital gains tax (CGT) consequences. More specifically: part or all of the secured property may be sold; and if guarantor security has been provided to support a facility limit, part or all of the guarantor security may be sold.
Increasing interest rates
Increases in interest rates may result in your monthly loan interest payments (in combination with your monthly principal repayment obligation) being greater than you budgeted for.
Changes to approved investment lists
This may create the need to switch into a new approved investment. The sale of an existing investment may trigger CGT consequences.
Falling interest rates
This may place a greater burden on your other sources of available cash.
NAB Equity Builder Rates
Variable interest rates (p.a.)
| Less than $250,000 | 6.95% |
|---|---|
| $250,000 - less than $1.0M | 6.70% |
| $1.0M & above | 6.45% |
Download all interest rates PDF (21KB) - Rates effective from 18 April 2017
Call 1300 135 145
