What is a Securities-Backed Loan (SBL)?

An SBL — also called a pledged asset line or portfolio line of credit — lets you borrow against your brokerage portfolio without selling it. You pledge your stocks, bonds, or funds as collateral and receive a loan at a rate typically 1.5–2.5% above SOFR. The portfolio stays invested and continues compounding.

What is the advance rate on an SBL?

The advance rate is the maximum percentage of your portfolio value you can borrow. Diversified equity portfolios: 50–70%. Balanced 60/40 portfolios: 65–75%. Bond-heavy portfolios: 70–85%. Concentrated single-stock positions: 30–50%. The lower the advance rate, the larger the buffer before a maintenance call.

What is a maintenance call?

If your portfolio value drops enough that the outstanding loan exceeds the advance rate applied to the new lower value, the lender issues a maintenance call — requiring you to either deposit more cash, add more securities, or repay part of the loan. This typically must be resolved within 24–72 hours.

Is SBL interest tax-deductible?

SBL interest used to purchase or carry investment property may qualify as investment interest expense, deductible on Schedule A (Form 4952). Interest used to purchase a home sits in a gray area — consult a tax advisor. This is a meaningful advantage vs mortgage interest, which requires itemizing.

Who offers securities-backed loans?

Major brokerage custodians including Fidelity (Portfolio Line of Credit), Schwab (Pledged Asset Line), UBS, and Morgan Stanley offer SBLs. Rates and advance rates vary. SoFi and some fintechs offer portfolio-backed loans at more competitive rates for smaller portfolios.

New

Securities-Backed Loan vs. Mortgage Calculator

Compare buying with an SBL — no down payment, portfolio stays fully invested — against a traditional mortgage. See which path leaves you wealthier after capital gains tax, compounding, and interest costs.

Capital Gains Tax on Down Payment

$60,000

Inputs

Home Purchase Price

$500,000$10,000,000

Holding Period

Portfolio Value

$500,000$15,000,000

Expected Annual Return

S&P 500 long-run average ~10%; conservative 60-40 ~6-7%

3%12%

SBL Advance Rate

Equities: 50–70% | Bonds: 70–85% | Single stock: 30–50%

30%85%

SBL Interest Rate (APR)

Pledged asset line — typically SOFR + 1.5–2.5%

3%12%

Down Payment

3%50%

Mortgage Rate (APR)

3%12%

Mortgage Term (Years)

↑ SBL Wins over 7 years

$76,963 advantage

Estimated net worth difference at year 7

SBL

Mortgage

Monthly Cash Flow

Monthly payment$10,563 int-only$10,367

Total paid over 7 yr$887,250$723,188

Upfront Costs

Down payment liquidated$0$400,000

Capital gains tax triggered$0$60,000

Closing / lender costs~$0$50,000

Estimated Wealth at Year 7

Portfolio value$4.82M$4.08M

Loan balance remaining$1.95M$1.45M

Est. net worth$4.61M$4.53M

SBL LTV Ratio65.0% — High Risk

0%50%65%85%

Maintenance call threshold

$3.00M

Drop to trigger call

0.0% decline

Your portfolio only supports $1.95M in SBL borrowing — $50K short of the purchase price. Consider a larger portfolio, higher advance rate asset mix, or a hybrid approach.

Return Sensitivity — Who Wins?

Annual Return	Winner	Advantage
4%	Mortgage	$-56K
5%	Mortgage	$-14K
6%	SBL	+$30K
7%you	SBL	+$77K
8%	SBL	+$127K
9%	SBL	+$179K
10%	SBL	+$235K

Assumes 4% annual home appreciation. Tax assumptions held constant.

Capital Gains Tax on Down Payment

$60,000

Max SBL Available

$1,950,000

SBL Covers Purchase

Down Payment Amount

$400,000

Mortgage Loan Amount

$1,600,000

Embedded Gain

60.00%

SBL Monthly Interest

$10,833

Mortgage Monthly P&I

$10,367

SBL LTV Ratio

66.67%

Maintenance Call Threshold

$3,076,923

Portfolio Drop to Trigger Call

-2.56%

Diagnostic

SBL needs $1,950,000 available against your $3,000,000 portfolio. Down payment triggers $60,000 in capital gains tax.

Compare SBL lenders

Coach Insight

A HNW buyer with a $3M portfolio and $2M home purchase faces a critical choice: liquidate $400K for a down payment (triggering capital gains tax) or pledge the portfolio as collateral and keep it compounding. The SBL wins when portfolio returns exceed the borrowing rate. The mortgage wins when they don't. This calculator shows exactly where the crossover is.