Thanks for the posts everyone

mattnz, you are right, I am a kiwi, however I live in Australia, and my wife and daughter are both Australian.

Cheers

Hello there, and thank you for both the welcome and your post.

I don't think I explained myself very well in my first post, so I will try with an actual example, using my situation

I have a townhouse valued at 360k, for which I have a current loan of $210k
I have shares values at $65k, for which I have a current loan of $50k
I do not have any marginal lending on those shares.
Both loans are with ING, in a split loan account. and therefore my total loan with ING is $260k
I would want to keep my current shares for then forseable futute

Lets assume I want to purchase another property valued at $400k.  For the sake of this scenario I will ignore stamp duty and other expenses, and also assume I have an income to support such a purchase

Scenario 1 – Shares can be used as capital
My current capital is $360k (house) + $65k (shares) = $425k, and I owe $260k.  If creditors were to access my situation, they would consider that my new total loan would be $260K + $400k = $660K, and my new total capital would be $425K + $400K = $825K.  Therefore in this situation I would be borrowing exactly 80% of my capital, which is a comfortable amount.

Scenario 2 – Shares cannot be used as capital
My current capital is $360k (house), and I owe $260k.  If creditors were to access my situation, they would consider that my new total loan would be $260k + $400k = $660k, and my new total capital would be $360k + $400k = $760k.  In this scenarion I am now borrowing 87% of my capital.  This is not as attractive to the lender, and I would be subect to mortgage insurance.

Basically, I am not sure if the volatile nature of shares mean that creditors will not take them into consideration or not when accessing my finances.  And if they don't, that means that shares become a lot less attractive, because everytime I borrow money to purchase them, my borrowing capacity would be going down regardless of how well the shares are doing.

Thanks again.