How brokerage margin pricing works
Brokers publish tiered margin rates: the more you borrow, the lower the rate on the incremental tranche. Pricing is usually quoted as a benchmark rate plus a spread, and the spread shrinks sharply as balances rise. Unlike a private bank, there is no negotiation and no relationship discount — the tier table is the price.
The trade-off is governance. Broker margin is regulated by exchange maintenance requirements, so the broker can and will liquidate positions automatically when equity falls below maintenance. There is no relationship manager to call, no cure period beyond the stated window, and no discretion.
Indicative margin rates by tier, 2026
| Borrowed balance | Low-cost brokers | Full-service brokers | Private bank Lombard |
|---|---|---|---|
| Under $100k | ~5.5–6.5% | ~10–13% | Usually declined |
| $100k – $1m | ~5.0–5.8% | ~8–11% | ~3.5–5.0% |
| $1m – $3m | ~4.6–5.3% | ~7–9% | ~3.2–4.5% |
| Above $3m | ~4.3–5.0% | Negotiated | ~3.0–4.2% |
Rates are indicative for USD borrowing in 2026 and move with SOFR. Full-service brokerage margin remains the most expensive way to borrow against securities at almost every balance level.
Margin loan vs Lombard facility for golden visa financing
The last row decides more golden visa cases than the interest rate does. Immigration authorities and fund administrators want a clean, documented source of funds. A private bank facility comes with a comfort letter and a named banker; a brokerage margin balance frequently does not satisfy the same scrutiny.
| Factor | Brokerage margin | Private bank Lombard |
|---|---|---|
| Cost at $1m+ | Higher (retail spread) | Lower (negotiated margin) |
| Speed to draw | Immediate | 2–6 weeks to establish |
| Eligible collateral | Listed securities only | Securities, funds, bonds, some structured products |
| Margin call handling | Automated liquidation | Negotiated cure, relationship discretion |
| Multi-currency drawdown | Limited | Standard |
| Proof of funds for immigration | Often not accepted | Bank comfort letters routinely issued |
Maintenance requirements and forced liquidation
- Brokerage maintenance margin is typically 25–30% equity for diversified US equities, and much higher for concentrated or volatile positions.
- Liquidation is automatic and the broker chooses which positions to sell — usually the most liquid, which are often the ones you least want to lose.
- Private banks apply advance rates per line rather than a blanket maintenance percentage, and normally give a 2–5 business day cure period.
- A 30% portfolio drawdown will trigger a call on most margin accounts drawn above 40% LTV. Model this before committing borrowed funds to a five-year immigration lock-up.
When margin is the right tool
Margin lending is genuinely better in three situations: bridging a short gap of weeks before a Lombard facility completes, funding amounts too small for a private bank to bother with, and cases where you want to keep the portfolio exactly where it is rather than transferring custody.
For a five-year golden visa commitment above roughly €500,000, a Lombard facility is almost always cheaper and structurally safer. The cost gap of 100–200 basis points compounds meaningfully over the holding period, and the liquidation mechanics matter more than the headline rate when the investment cannot be unwound on demand.
Frequently asked questions
Are margin loan rates lower than Lombard loan rates?+
Generally no at meaningful sizes. Low-cost brokers are competitive under about $250,000, but above $1m a negotiated private bank Lombard facility is typically 100–200 basis points cheaper.
Can I use a margin loan to fund a golden visa investment?+
Technically yes, but many programmes and fund administrators apply strict source-of-funds checks that a brokerage margin balance may not satisfy. Private bank facilities come with documentation designed for exactly this purpose.
How much can I borrow on margin?+
Regulation and broker policy usually cap initial borrowing at 50% of the value of eligible marketable securities, with maintenance requirements of 25–30% thereafter. Concentrated positions are advanced at far lower rates or excluded.
Do margin loan rates change?+
Yes. They float against the benchmark rate and brokers can revise published tiers at any time with short notice.
Discuss your financing with a CISI Level 7 adviser
We model the loan against your actual portfolio, the programme you are targeting, and your tax residency — before you commit capital. No product commission, no obligation.