Hi Can someone explain in simple terms how capitalising interest works with regard to purchasing shares and letting the interest capitalise.
How do you set up the account structure for it?
How do you talk to the banks to make sure it works correctly and how long should you capitalise your interest for?
Thanks
A margin loan is like a LOC. You don't need to make repayments – the interest is added to the account each month and the balance increases. As long as the total balance is under the allowable limit set by the security value then you will not be asked to make any payments.
So to capitalise interest on a margin loan just do nothing. It happens automatically.
Does this answer your question?
I am in no way making any advice here – just commenting on the mechanics of the margin loan.
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