Shares as Security – When Banks Say No (2026)

In today's competitive property market, finding ways to secure a home loan can seem daunting. For many Australians, the traditional route of using cash or property equity as security might not be feasible. But what if you could leverage your investment portfolio to help you secure a home loan? If you're an investor holding a diverse portfolio of shares, you might be wondering: "Can I use shares as security for a home loan?" Let's explore this option in detail.

Understanding the Use of Shares as Security

When it comes to securing a home loan, lenders typically require some form of collateral. Traditionally, this has been in the form of cash deposits or equity in existing property. However, shares, which represent ownership in a company, can also be considered as a form of security. This essentially means that if you default on your loan, the lender has the right to claim your shares to recover the owed amount.

Key Information: Rates, Requirements, and Options

Using shares as security for a home loan comes with its own set of requirements and conditions. Here's what you need to know:

Firstly, not all lenders will accept shares as security. Among the lenders that do, the following are common considerations:

• Type of Shares: Generally, lenders prefer blue-chip stocks due to their stability and reliability.
• Market Value: Shares need to have a substantial and consistent market value.
• LVR (Loan to Value Ratio): Typically, lenders might offer an LVR of up to 70% on blue-chip shares.
• Interest Rates: Rates can vary significantly depending on the lender and your overall financial profile. As of 2026, rates for loans secured by shares might range from 6.49% to 12%.

Here's a comparison of potential options:

At Esteb and Co, with our access to 83+ lenders, we can help you find the right lender to suit your needs.

Steps to Use Shares as Security for a Home Loan

1. Evaluate Your Portfolio: Ensure your shares meet the lender's criteria for market value and stability.
2. Consult a Mortgage Broker: Working with a broker like Esteb and Co can help identify lenders willing to accept shares as security.
3. Prepare Documentation: Gather necessary documentation, including share certificates and valuation reports.
4. Submit Your Application: With your broker's assistance, prepare and submit your loan application.
5. Negotiate Terms: Discuss and negotiate terms, including interest rates and repayment schedules.
6. Finalise the Loan Agreement: Once approved, carefully review and sign the loan agreement.

Tips and Considerations

Before proceeding, here are some expert tips and considerations:

• Market Volatility: Shares are subject to market fluctuations. Ensure your portfolio can withstand potential downturns.
• Risk Assessment: Consider the risks involved in using shares as collateral, especially if you are relying on them for future income.
• Diversify: Maintaining a diversified portfolio can help mitigate risks associated with market volatility.
• Professional Advice: Seek advice from financial advisors to understand the potential impacts on your investment strategy.

Frequently Asked Questions

• Can all shares be used as security for a home loan?
  Not necessarily. Most lenders prefer blue-chip stocks due to their stability.
• What happens if the value of my shares drops?
  If the value significantly drops, the lender may require additional security or repayment.
• Are the interest rates higher for loans secured by shares?
  Interest rates can be higher, reflecting the additional risk the lender assumes.
• Can I sell my shares during the loan period?
  Generally, shares used as security cannot be sold without the lender’s consent.
• Is using shares as security a common practice?
  While not as common as using property equity, it is a viable option for those with substantial investment portfolios.
• What documentation is needed to use shares as security?
  You'll need share certificates, valuation reports, and possibly a portfolio summary.
• Can Esteb and Co help me find the right lender?
  Yes, with our extensive panel of 83+ lenders, we can assist in finding a lender that suits your needs.