Margin Lending FAQs

Portfolio LVR

For more information on Margin Lending plese vist the CommSec Margin Lending product page


What is a Client ID & how does it work?

A Client ID is your individual client identification number which identifies you when you contact CommSec over the telephone or login to any of CommSec’s trading platforms. If you already have one or more CommSec Trading Accounts, your Client ID also gives you access to these, so you can transact and trade all with one login.

You can currently login using a CommSec account number, but if you do so, you will only be able to view that particular account, and will not be able to view any of your Cash Management accounts. So it makes sense to use your Client ID and take advantage of the CommSec Cash Management's integrated access and a single view of all your accounts.  

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What is “Gearing” & “Leverage”?

Gearing – put simply, is borrowing funds to invest. Gearing ratios represent the combined ratio of your own funds and borrowed funds for an investment.
Leverage – in the context of the sharemarket is the practice of borrowing money to supplement existing funds for investment in such a way that the potential positive or negative outcome is magnified and/or enhanced.

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How does a margin loan work & what is an LVR & LSR?

A margin loan is a loan that uses approved shares, managed funds & cash that you already own as security for a flexible line of credit to allow you to buy more shares or units in managed funds. Through the effect of leveraging it may offer you greater exposure to both the share and managed fund markets and may offer you a greater return when the price goes up. Leverage may also expose you to greater losses when the price goes down.

An LVR, or Loan to Valuation Ratio, is the amount of the loan borrowed in proportion to the value of your approved share or managed fund. For example, if a particular share has an LVR of 70% - this means we allow you to borrow up to 70% of the value of the share on the proviso that you provide the other 30%.


An LSR, or Loan Security Ratio, is the amount of the loan borrowed in proportion to the value of your portfolio’s lending value. As the market value of your portfolio rises and falls, so does its lending value. If the market falls far enough, your portfolio’s lending value may fall below your current loan balance – which is when a Margin Call is triggered.

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What is a margin call & what are my obligations’ if a margin call is triggered?
A margin call is triggered if your loan balance exceeds the lending value of your portfolio by more than 5%. 5% is the buffer in which we allow you to restore the gearing level of your portfolio before a margin call is triggered.

When a margin call is triggered you must immediately adjust your gearing level so that it is equal to or below your portfolios current lending value. A margin call must be met by 2pm Sydney time on the day after the margin call.

To meet a margin call you can either:

a) Deposit money into your loan account to reduce your loan balance.
b) Provide additional fully owned shares or managed fund units to increase your portfolio value.
c) Sell part of your portfolio and using the proceeds to repay part of your loan.


It is your responsibility to ensure that you do not allow your loan to trigger a margin call. If your loan does trigger a margin call it is your responsibility to ensure that the margin call is satisfied in full within the required time. If you do not take action within the required time we may sell some or all of your securities to reduce your loan balance.

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How do I move funds in & out of my Margin Loan?

This is done by transferring funds online.  Login to the CommSec website, click on 'Margin Lending' on the top navigation then 'Administration > Margin Loan Online Requests & Forms' and click on the 'online' link under 'Loan Funds Transfer' to either draw down or top up funds in your loan.

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Am I able to protect my shareholding position from potential large losses while still holding my portfolio with the potential for large profits?


In most cases - Yes. In order to protect your approved shares from falling share prices you can buy a put option to lock in a guaranteed sale price for your shares at or before a specified date in the future. There are requirements with buying a put option which you will need to consider such as:
a) Are there exchange traded put options available for my shares?
b) How long do I want the protection to be in place for?
c) Is the cost of buying the put option worthwhile as part of my investment strategy?

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What does it cost me to trade through my Margin Loan?

The brokerage for your share trades are at CommSec’s lowest rate of brokerage when trading on the internet when you trade through your CommSec Margin Loan account. That is $19.95 for trades to a value of $10,000 in trade premium, $29.95 for trades between $10,001 and $25,000 in trade premium, and 0.12% of the total trade value for trades of $25,001 & above. There is also a $10 fee for each settlement that occurs from the margin loan.

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 Can I transfer both my shares & loan from another Lender?

 Providing your loan balance does not exceed your portfolio lending value if the transfer was completed, then we can refinance your whole loan from your current lender. You just need to complete section 8 of the CommSec Margin Loan application form .   

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Portfolio LVR

What is Portfolio LVR?
CommSec Portfolio LVR is an enhanced feature of the CommSec Margin Loan which rewards investors who hold diversified portfolios. Portfolio LVR provides higher loan to value ratios (LVRs) on equities on our approved list. As an added bonus, it also provides LVRs on securities which usually have 0% Standard LVR (Bonus Stocks).

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What are the benefits of Portfolio LVR?
Portfolio LVR provides you with the flexibility to enjoy a greater cushion against margin calls or utilise the increased lending values to further grow your portfolio.

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What are the risks of Portfolio LVR?
Portfolio LVR increases your portfolio’s lending values which you can utilise to increase your investment exposure. This may have the effect of multiplying any losses, as well as gains, in your portfolio.
If your portfolio qualifies for Portfolio LVR, trades you place may significantly affect your gearing ratios. For example, if you sell an approved security and as a result there are fewer than 5 approved securities in your portfolio, your portfolio will no longer qualify to receive Portfolio LVR and you will lose Portfolio LVR on all approved equities. The LVR will revert to standard or single stock LVRs, which could potentially trigger a margin call. We strongly recommend that you use the What-If calculator on the CommSec website to see what the effect of any trade might be on your loan position. The What-If calculator is available once you log-on to your margin loan page at www.commsec.com.au

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How do I qualify for Portfolio LVR?
If you hold 5 or more approved securities in your portfolio, you will qualify for Portfolio LVR on the approved equity exposures.

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What securities does Portfolio LVR apply to?
Portfolio LVR is only applied to Approved Equities. The Approved Equities list is available on the CommSec website.

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What’s the difference between ‘approved securities’ and ‘approved equities’? 

  • Approved securities are any securities (equities, managed funds and cash) which are taken into account when calculating your portfolio’s lending value. 
  • Approved equities are those equities which are listed in our approved list that qualify for the additional LVRs offered by Portfolio LVR and do not include managed funds, cash or other non-equity holdings in your portfolio.

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How is Portfolio LVR calculated?

  • If the approved equity has a non-zero standard LVR

Portfolio LVR = Standard LVR + 5%

  • If the approved equity has a 0% standard LVR

Portfolio LVR = 40%

Standard LVR is the LVR applicable to equities where an investor holds between 2 and 4 approved securities in their portfolio.

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Are security weightings considered in assessing a diversified portfolio?
PLVR is designed to reward portfolios that are comprised of diversity and less risk. In order for a diverse portfolio to have reduced risk, the portfolio must not be heavily weighted in any one stock. The weighting of the securities in your portfolio are therefore considered in order to be eligible for PLVR. As weighting limits may change from time to time, to find out the current weighting requirements for PLVR please contact us on 13 17 09.

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Do I automatically receive Portfolio LVR if my portfolio meets the criteria?
Yes, once our systems recognise that your portfolio meets our diversification criteria, you will automatically begin to receive Portfolio LVR on approved equities.

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What are bonus stocks?
Bonus stocks are equities which are also on our approved list and have a 0% standard LVR. However, as a benefit of Portfolio LVR, on a diversified portfolio they receive a 40% LVR.

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How does Portfolio LVR apply to capped stocks?
If you are granted Portfolio LVR prior to us capping the equity, you will continue to receive Portfolio LVR on the capped equity as long as your portfolio meets the Portfolio LVR qualification criteria.

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What happens if I sell down to fewer than 5 approved securities?
If you sell down to fewer than 5 approved securities in your portfolio, your portfolio will be classified as ‘undiversified’. As a result, you will only receive standard LVRs or single stock LVRs. This may affect your security value and could potentially put you in margin call. We strongly recommend that before placing sell orders on your portfolio, you utilise the what-if calculator on our website to determine the impact of the sale will have on your loan position.

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Can I go into a margin call as a result of selling a security?
Yes, if your portfolio becomes undiversified (see above), your portfolio lending value can be drastically decreased and the lending value of bonus stocks will fall to 0%. We strongly recommend that you check before selling a part of your portfolio that it does not become undiversified after the sale or that you will have sufficient security post selling to ensure that you are not in margin call.

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What if I have further questions about Portfolio LVR?
Our margin lending specialists can help you with any specific queries about Portfolio LVR or margin lending in general. Please feel free to contact us on 13 17 09 between 8am and 8pm AEST weekdays (excluding national public holidays).

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