Leverage calculator: what does a loan on your shares and funds do?
Borrow against the shares and funds you own and see how much faster your money can grow, what the interest and the tax cost, and what happens when the market falls as it has before. Free, and nothing you enter is saved.
With the loan and without
Your money in 10 years with the loan
976 234 kr
Without the loan 927 130 kr: the loan gives 49 103 kr more.
If the market gives 7 % every year
- The holdings
- 1 103 964 kr
- The loan, with the interest
- −127 730 kr
- Your money
- 976 234 kr
- Without the loan
- 927 130 kr
- Leverage factor
- 1,2 times
- Loan-to-value
- 17 %
- Pays above
- 3,6 %
- The interest costs 39 615 kr over 10 years, 27 730 kr after the deduction.
- The ISK tax on what you bought with the loan costs 14 402 kr more.
- The loan only pays if the market gives more than 3,6 % a year.
If the market falls as it has before
The bank starts selling if the market falls more than 76 %. Then the loan is larger than the lending value, 70 % of the holdings, and the shortfall has to be covered at once. No fall in the history of the S&P 500 has been that deep.
| The fall | Without a loan | With the loan | When the market is back |
|---|---|---|---|
| The oil crisis, 1973 to 1974fell 48 % | 258 982 kr | 210 778 kr | 500 000 kr |
| Black Monday, 1987fell 34 % | 332 452 kr | 298 943 kr | 500 000 kr |
| The dot-com crash, 2000 to 2002fell 49 % | 254 265 kr | 205 118 kr | 500 000 kr |
| The financial crisis, 2007 to 2009fell 57 % | 216 123 kr | 159 348 kr | 500 000 kr |
| The pandemic crash, 2020fell 34 % | 330 375 kr | 296 450 kr | 500 000 kr |
| The rate shock, 2022fell 25 % | 372 875 kr | 347 449 kr | 500 000 kr |
As if the fall started today, without the interest and the time it took. Without a loan your money comes back with the market; what the bank sold on the way down does not.
2 000 possible futures over 10 years
| Outcome | Without a loan | With the loan |
|---|---|---|
| Bad (1 in 10 is worse) | 498 730 kr | 465 151 kr |
| In the middle | 933 748 kr | 983 225 kr |
| Good (1 in 10 is better) | 1 604 384 kr | 1 785 965 kr |
- In 23 % of the futures the loan left you with less than no loan would have.
- In none of them did the bank have to sell.
- In 12 % you ended with less than you started with (10 % without a loan).
- In the middle future your money fell at most 35 % along the way (30 % without a loan).
The simulation draws whole years at random from the S&P 500 since 1960, with the real swings but moved to your expected return. It looks once a month, so a quick fall within a month is missed, and the real risk is if anything larger.
From a FIRE point of view
A loan can bring financial independence closer when the market rises. A forced sale in a crash can push it years away, because what the bank sells at the bottom never comes back.
In the middle future the loan gives 49 477 kr more after 10 years. In a bad one (1 in 10) it gives 33 579 kr less.
If you borrow: borrow little, keep money aside to put in when the market falls, and count on the rate rising.
Worked example: step by step with your numbers
- You have 500 000 kr and borrow 100 000 kr, so you own shares and funds for 600 000 kr. Your money moves 1,2 times as much as the market: if it rises 10 %, your money rises 12 %.
- The loan is 17 % of the holdings. The bank lends against 70 % of their value, 420 000 kr now, so you could borrow 320 000 kr more.
- If the holdings fall to 142 857 kr, the loan is as large as the lending value. That is a fall of 76 %. After that the bank sells to bring the loan back down.
- The rate of 3,5 % on 100 000 kr is 3 500 kr the first year. 30 % comes back as a tax deduction, so it costs 2 450 kr. Here the interest is added to the loan, which grows to 127 730 kr in 10 years.
- On an ISK you pay 1.065 % a year on the value above 300,000 kr, on what you bought with the loan too. Over 10 years the loan adds 14 402 kr in tax.
- If the market gives 7 % every year, the holdings grow to 1 103 964 kr. Less the loan, 127 730 kr, you have 976 234 kr. Without the loan you would have had 927 130 kr, so the loan gives 49 103 kr more.
- The loan only pays if the market gives more than 3,6 % a year. Below that the interest and the tax cost more than the borrowed money earns.
- But the market does not rise evenly. If it falls 57 %, as it did at its worst (The financial crisis, 2007 to 2009), your money is 159 348 kr, against 216 123 kr without a loan.
The risks with a loan on shares
A loan makes the good years better and the bad years worse. Over time the market has risen, so a loan has often paid, but the path there goes through falls that a loan makes deeper.
- Losses grow as much as gains. With a loan of a third of the holdings, a fall of 30 % takes 45 % of your own money.
- The bank sells at the bottom. What is sold in a crash does not come back when the market does.
- The rate can rise, and the bank can lower the lending value when the market is nervous.
- The ISK tax is paid on the borrowed money too, so the loan has to earn more than the interest.
- It is harder to sit still. A loan makes it more tempting to sell at the wrong time.
From a FIRE point of view a small loan can speed up the saving, but the plan has to survive the worst years. Many who borrow keep the loan below a tenth of the holdings and have money aside to put in if the market falls.
How borrowing against shares works
- Lending value
- The share of a holding's value the bank lends against: often 60 to 80 % for broad index funds, less or nothing for small companies. The bank sets it and can lower it, often when the market is at its most nervous.
- Loan-to-value
- How large the loan is compared with the holdings. What you buy with the loan is security for it too.
- When the market falls
- If the loan becomes larger than the lending value you must cover the shortfall at once, by putting in money or selling. Otherwise the bank sells, at whatever the price is that day.
- The interest
- The rate is variable. Many brokers give a discount when you borrow a small part of the holdings and charge about 7 % above that.
- Tax
- Since 2026 interest is only deductible on loans with security; shares and fund units count when the loan is from a bank or a securities company, a capital insurance does not. On an ISK the tax is counted on the holdings without the loan deducted.
The calculation is an estimate, not financial advice. Your broker decides the lending values, the rate and when it sells.
Questions about borrowing against shares
How much can I borrow against my shares and funds?
As much as the lending value allows. Each holding has one, often 60 to 80 percent for broad index funds and less or nothing for small companies. What you buy with the loan is security too, so in theory you can borrow more than your own money, but then a small fall is enough for the bank to sell.
What happens if the market falls?
Your money falls faster than the market. If the loan becomes larger than the lending value, you must put in money or sell at once, otherwise the bank sells. It sells at that day's price, often near the bottom, and what is sold does not come back when the market recovers.
Can I deduct the interest?
Yes. Since 2026 interest is only deductible on loans with security, and listed shares and fund units count when the loan comes from a bank or a securities company. 30 percent of the interest comes back on your tax, 21 percent on the part above 100,000 kronor a year. A loan with a capital insurance as security gives no deduction.
How does a loan affect the tax on an ISK?
The tax on an ISK is counted on the value of the holdings, and the loan is not deducted. You therefore pay tax on what you bought with borrowed money too: 1.065 percent a year in 2026 on the value above 300,000 kronor. That comes on top of the interest.
How much should I borrow?
Ask how deep a fall you can take without the bank selling, and without selling yourself. At a lending value of 70 percent, a loan of a tenth of the holdings has survived every fall in the history of the S&P 500. A loan of half the holdings would not have survived the financial crisis.
How does the simulation work?
It builds 2,000 possible futures from whole years of real market history, drawn at random, with the swings kept but the average moved to the return you expect. The same draws are used for every calculation, so changing the loan shows the effect of the loan, not of luck. It is not a forecast.