A securities-based line of credit (SBLOC) is a revolving loan secured by a taxable investment account. Your rate is a benchmark, usually SOFR, plus a spread that gets smaller as the line gets bigger. That spread is the part worth negotiating, and it varies more between lenders than most borrowers realize.
How SBLOC rates are set
Nearly every securities-based line floats. The rate has two parts:
- The index: usually the Secured Overnight Financing Rate (SOFR), which the New York Fed publishes every business day. It moves with Federal Reserve policy, so your rate changes when SOFR does. SOFR was 3.95% on November 2, 2026 (New York Fed).
- The spread: a fixed margin the lender adds on top. It is set by the size of your line, and sometimes by how much else you keep with the firm.
You pay interest only on what you draw, not on the full line, and most lenders require only monthly interest payments.
Published SBLOC rates at Schwab and Fidelity
Two of the largest custodians publish their rate tiers, which makes them a useful yardstick for any quote you receive. Rates below use SOFR of 3.95% as of November 2, 2026, and will move with it.
| Line size | Spread | Rate at SOFR 3.95% |
|---|---|---|
| $100,000 to $249,999 | SOFR + 4.40% | 8.35% |
| $250,000 to $499,999 | SOFR + 3.90% | 7.85% |
| $500,000 to $999,999 | SOFR + 3.40% | 7.35% |
| $1,000,000 to $2,499,999 | SOFR + 2.90% | 6.85% |
| $2,500,000 and above | SOFR + 2.40% | 6.35% |
Schwab also offers Investor Advantage Pricing discounts of 0.25% to 1.00% for clients with $250,000 to $10 million or more in qualifying assets. Source: Schwab Pledged Asset Line rates.
| Line size | Spread | Rate at SOFR 3.95% |
|---|---|---|
| $100,000 to $499,999 | SOFR + 3.10% | 7.05% |
| $500,000 to $999,999 | SOFR + 2.85% | 6.80% |
| $1,000,000 to $2,999,999 | SOFR + 2.35% | 6.30% |
| $3,000,000 and above | SOFR + 1.90% | 5.85% |
Fidelity’s minimum line is $100,000. Source: Fidelity securities-backed line of credit. Both lenders can change their spreads at any time; confirm current terms before you apply.
Wirehouses and private banks such as Morgan Stanley, Merrill, and UBS also offer these lines, but they generally do not post a rate table the same way. Pricing is set case by case and can depend on how much you keep with the firm. Ask for the spread over SOFR in writing, and compare it with the tables above.
Estimate your interest cost
SBLOC interest estimator
Simple interest on a constant balance, for illustration only. Actual interest accrues daily at a rate that changes with SOFR.
On a $500,000 draw, every 0.50% of spread is $2,500 a year. The gap between the smallest and largest tiers above is 2% or more, which is why the size of the line, and the lender, matter as much as the benchmark. To test whether borrowing beats selling or paying cash, try our cash vs. leverage calculator.
How much you can borrow
Lenders lend a percentage of each holding’s value, called the loan value or advance rate. According to FINRA, it is typically 50% to 95% of the account value depending on what you own: broadly diversified stocks and funds sit at the lower end, high-grade bonds and Treasuries at the higher end. Concentrated positions, volatile stocks, and some funds may get less or nothing. Retirement accounts cannot be pledged.
The risks to understand first
- Maintenance calls. If your holdings fall and the collateral no longer supports the loan, you must add assets or pay down the balance, usually within two or three days.
- Forced sales. If you cannot meet a call, the lender can sell your securities without notice, at a bad time and possibly with a tax bill.
- Demand loan. The lender can generally call the loan or change collateral rules at any time.
- Rising rates. A floating rate means your cost goes up when SOFR does.
- Harder to move. Pledged assets usually cannot transfer to another firm until the loan is repaid or refinanced.
Source: FINRA: Securities-Backed Lines of Credit. A conservative rule many planners use is to draw well below the maximum so a market drop does not trigger a call.
SBLOC vs. margin loan
| SBLOC | Margin loan | |
|---|---|---|
| Can buy securities | No (non-purpose loan) | Yes |
| Account | Separate pledged account, often at an affiliated bank | Inside your brokerage account |
| Pricing | SOFR plus a tiered spread | Broker’s base rate plus a spread, often higher for the same balance |
| Typical minimum | $100,000 line | Low |
| Calls and forced sales | Yes | Yes |
Taxes: borrowing instead of selling
Borrowing does not trigger capital gains tax, which is the main reason families with low-basis stock use these lines instead of selling. Whether the interest is deductible depends on how the money is used: interest on personal spending generally is not, while interest traced to an investment or a business may be, subject to limits. Some families hold appreciated assets for life and borrow against them, so heirs receive a step-up in basis. That approach, sometimes called “buy, borrow, die,” depends on current tax law and on carrying the loan through every market. Talk to your CPA before you borrow.
Already have a line at your bank or wirehouse?
Bring your loan statement. We’ll compare your spread with published rates and look at whether selling, borrowing, or a mix fits your tax picture better.
Request a reviewWirehouse and private bank lending vs. an independent advisor
Lending is a big reason families keep assets at a wirehouse or private bank. The firm lends from its own balance sheet, and the rate can improve as you move more assets there. That can be a good trade, or it can be offset by higher fees elsewhere in the relationship. An independent advisor does not lend, but can compare your current line with custodian lines, such as those at Schwab and Fidelity, and with other lenders. Rubiq’s clients hold their accounts at Schwab and Fidelity. See our comparisons of wirehouse vs. independent advisor and private bank vs. independent advisor, and our guide to concentrated stock if the collateral is mostly one company.
Questions to ask any lender
- What is my spread over SOFR, and what would lower it?
- What advance rate applies to each of my holdings?
- At what account value would I get a maintenance call, and how long would I have to meet it?
- Can you change collateral rules or call the loan, and with what notice?
- Does my advisor or the firm earn anything from this loan?
- What happens to the line if I move my accounts?
Frequently asked questions
What is an SBLOC?
A securities-based line of credit (SBLOC) is a revolving loan secured by the stocks, bonds, and funds in a taxable investment account. You can borrow against the portfolio without selling it, pay interest only on what you draw, and repay on your own schedule. The lender can require more collateral or sell holdings if the account value falls.
What are current SBLOC rates?
Most SBLOCs float at SOFR plus a spread that shrinks as the line gets larger. As of November 2, 2026, with SOFR at 3.95%, Schwab’s Pledged Asset Line ranged from 8.35% for the smallest lines to 6.35% for $2.5 million and up, before relationship discounts, and Fidelity’s line of credit spreads ranged from SOFR + 3.10% to SOFR + 1.90%. Large relationships can often negotiate lower spreads.
What is the difference between an SBLOC and a margin loan?
Both are secured by your investments. A margin loan can be used to buy more securities, while an SBLOC is a non-purpose loan that cannot. SBLOCs are usually set up in a separate pledged account and are often priced lower than standard margin rates for larger balances.
Can I use an SBLOC to buy stocks?
No. SBLOC proceeds cannot be used to buy or carry securities. They can be used for almost anything else, such as real estate, a tax bill, a business need, or bridge financing.
Is SBLOC interest tax-deductible?
It depends on how the money is used. Interest on money used for personal purposes is generally not deductible. Interest traced to an investment, such as a real estate purchase held for investment, or to a business may be deductible under the interest tracing rules, subject to limits. Confirm with your CPA before you borrow.
What happens to an SBLOC if the market falls?
If the value of your collateral drops below what the loan requires, you will get a maintenance call to add assets or pay down the loan, usually within a few days. If you cannot, the lender can sell your holdings without notice, which may also trigger capital gains tax.
What is the buy, borrow, die strategy?
It describes borrowing against appreciated assets instead of selling them, then holding the assets until death so heirs receive a step-up in cost basis. It can defer or avoid capital gains tax, but the interest compounds, the loan carries market risk, and the result depends on tax law that can change.