Savings Report #83 - Margin Loan

A little update as I’m already late this month.

May was a rollercoaster of work and now I’m on parental leave for the rest of the year. We’re planning some trips over the next 6 months but have to get comfortable doing it with Baby SavingNinja - everything is so much more complicated now.

We’re still trying to sell our house, it’s caused a lot of hassle over the past 5 years, and more and more I’m thinking it was a terrible investment. We would have been better off renting and investing our deposit over the years and then we wouldn’t have been so tied down like we are now.

We still haven’t figured out what comes next. Due to this, we’re considering renting instead of buying again while we figure out what to do, then we wouldn’t be rushed into another house purchase as well. The only trouble is finding a landlord who will accept us, which proved difficult last time.

Our mortgage pay off with margin plan is ready to execute as soon as someone makes an offer on the house. We’ve amassed £96k in a savings account and we will take out a £60k margin loan. I had to do a bit of research to figure out how to withdraw margin in the UK - they blocked this in 2019 making it frustratingly complicated. With a little help from FIREVLondon I found out that I could buy GBP.USD to make my GBP balance positive and my USD balance negative, withdraw the GBP, then convert it to a negative GBP balance. So much faff when in the USA you can just withdraw the margin (I even had a credit card linked to my portfolio!)

I tested this out with £1000 and it seemed to work, so hopefully nothing goes awry when I do it with £60k in the next month or so. This will be 10% of my general investment account which is currently invested in VTI, so the portfolio would have to drop by 75% for it to be margin called, seems safe enough. I’ll also be paying off £5-10k per month and when the sale goes through, it will be paid off fully.