Investment Loans
Depending on the type of loan, the interest rate environment and your personal financial objectives, borrowing to invest may be a tactic worth considering as part of your long-term financial plan.
GP Wealth offers several different investment loan options. We encourage you to contact your professional financial advisor to discuss which options would be best for you.
It’s very important that your financial advisor discusses with you all of the risks associated with borrowing funds to invest. Before you acknowledge your understanding of the risks, your advisor should conduct a full review of the Leverage Disclosure Form. Following this discussion and review, your financial advisor will then determine if borrowing funds to invest is a suitable investment strategy for you.
The 1 for 1, 2 for 1 and 3 for 1 Investment Loan
This product is a revolving personal credit facility that allows you to purchase investment funds. With the 1 for 1 Investment Loan, you can borrow an amount up to the amount brought forward in cash or existing non-registered mutual funds. With the 2 for 1 you can borrow up to double the amount you bring forward in cash or non-registered mutual funds. And like the 2 for 1, with the 3 for 1 you can borrow up to three times the amount you bring forward in cash or non-registered mutual funds.
The 100% Investment Loan
The 100% Investment Loan is a term loan with principal and interest payments based on a long amortization. The Loan is ideally suited to credit-worthy investors that want to magnify their savings but don”t as yet have the mutual fund securities required to take advantage of one of our three other loan products. The 100% Investment Loan requires no money down!
Important Notice
Investment loans are offered through B2B Bank, a subsidiary of Laurentian Bank. Visit B2B Bank website for more details about this service.
Disclaimer
All Investment Loans are subject to meeting lending criteria. Using borrowed money to finance the purchase of securities involves greater risk than a purchase using cash resources only. If you borrow money to purchase securities, your responsibility to repay the loan and pay interest as required by its terms remains the same even if the value of the securities purchased declines.
Related Information
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Investment Loan FAQ
Frequently Asked Questions About Investment Accounts
In this FAQ, we answer the most common questions asked about Investment Loans. If you have any specific questions, send us an email and we would be pleased to help.
How much can I borrow to invest?
The credit limits and loan amounts vary as follows: 1 for 1, 2 for 1, 3 for 1 and Equal Your RSP:
- Minimum Credit Limit: $10,000
- Maximum Credit Limit: $250,000
100% Investment Loan:
- Minimum Credit Amount: $10,000
- Maximum Credit Amount: $250,000
What Are the Interest Rates Offered?
Investment Loan rates are floating based upon a tiered formula. The 1 for 1, 2 for 1, 3 for 1 and, Equal Your RSP rates are based on the balance of the loan outstanding (the spread above prime may move as the balance crosses rate grids) whereas the 100% Investment Loan rates are applied at the time of the loan advance and remain at that spread above prime for the duration of the loan.
What are my repayment options?
Minimum payment is interest monthly for the 1 for 1, 2 for 1, and Equal Your RSP. You may also choose to amortize the loan with a principal and interest payment. The payment on the 100% Investment Loan is set at 1.00% of the original principal amount borrowed. Consequently, a $50,000 Loan (for example) requires a monthly payment of $500.00 per month. The maximum amortization on the 100% Investment Loan is 20 years.
Monthly Payment Source
Pre Authorized Chequing (all loan types) or Interest Capitalization (1 for 1 only) is the process of adding the monthly loan interest to the principal balance of the loan each month.
What types of investments can I invest in?
The Investment Loan Program is only for use with Mutual Funds issued under a prospectus. Our loan-specific eligible list of funds contains over 40 of Canada’s top fund management companies with hundreds of eligible funds from which to choose.
Do I receive a statement of account?
Each 1 for 1, 2 for 1, Equal Your RSP and 100% Investment Loan borrower is provided with a loan statement that provides loan financial details as well as a quarterly investment account statement that provides clear and concise information on their investments.
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What Is a Margin Call?
What Is a Margin Call?
The loan to value ratio (LVR) is allowed to float up to 80% on a 1 for 1, 2 for 1 Loan and 3 for 1 Loan and up to 120% on an Equal Your RSP Loan. These are the Margin Call points for each loan type.
Should a Margin Call occur, GP Wealth Management Group requests that the account be brought down to an LVR of no greater than 75% for the 1 for 1, 2 for 1 Loan and 3 for 1 Loan or 110% for an Equal Your RSP Loan. This can be accomplished by paying down your loan, by pledging more eligible securities, or a combination of the two.
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How Can I Avoid a Margin Call?
How Can I Avoid a Margin Call?
We offer no-margin-call options for all of our investment loan types.
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Leverage Disclosure Form
Leverage Disclosure Form
Before borrowing to invest, we encourage you to read our Leverage Disclosure Form to ensure you’re aware of the risks.
Client Relationship Document
We’ve developed a plain-language document that describes the relationship between you and your GP Wealth Financial Advisor or Planner.