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If you are an investor considering acquiring a property, refurbishing a building or accessing liquidity without unwinding your portfolio, there is a solution that combines profitability, tax efficiency and flexibility: the Lombard loan.
This financial product, although historically reserved for high-net-worth individuals, is increasingly accessible to those with funds, shares or ETFs portfolios from €5,000. It originated in the Lombardy region (Italy), where in the sixteenth century merchants obtained loans using their assets as collateral, without the need to sell them. Hence its name.
What is a Lombard loan?
A Lombard loan is a financing formula that allows you to obtain liquidity by pledging your investments. That is, you hand over your assets as temporary collateral, without losing ownership or having to sell them.
📌 It involves 'pledg[ing]' your investments, or more clearly, 'mortgag[ing]' your funds without selling them.
The assets remain as collateral and you receive a percentage of their value in loan form. Meanwhile, your money remains invested and generates returns.
How does it work?
1. The client provides a portfolio of financial assets: funds, ETFs, shares…
2. The financial institution assesses their value and offers a loan which can reach up to 95% in some cases.
3. The money is transferred efficiently, usually without notarial intervention.
4. You may choose an amortisation system with a grace period, meaning you pay only interest for a time and repay the capital at the loan’s end.
5. This formula is especially useful if you buy to resell: you use a low payment and settle all upon selling the property.
📈 Amounts: from €5,000 up to €2,000,000
🗓 Terms: from 6 months up to 10 years
Main advantages for investors
Total financing (beyond 100%)
A mortgage for investors hardly exceeds 70% financing. With a Lombard loan you can cover 100% of the property's value, and even add expenses, renovations or additional liquidity.
You keep your investment
You do not need to sell your fund, therefore:
• You continue generating returns with your portfolio.
• You avoid capital gains taxation.
• You preserve your financial strategy intact.
Tax-deductible and fiscally efficient expense
The interest on a Lombard loan can be deductible on your personal income tax (IRPF) if the purchase is for rental purposes, which further enhances its profitability.
More profitable than buying outright
Let's see it with a real example:
Imagine you have an investment fund of 200.000 € that generates an annual return of 7% (€14,000 per year).
You want to buy a property costing 100.000 € which you plan to rent out for a 6% annual return(€6,000).
• If you buy outright: you use €100,000 from the fund → You have €100,000 left which earns €7,000 → Total annual gain: 13.000 €
• If you use a Lombard loan at 3%, you don't touch your fund (continue earning €14,000), pay €3,000 interest and receive €6,000 rental income → Total gain: 17.000 €
🟢 Result: you have earned a 30,7% more than buying outright, and without selling your investments. This can be even higher if you consider tax benefits.
📓 No linked products or commitments
Unlike a mortgage, you are not obliged to:
• Take out life, home or payment protection insurance.
• Direct salary payments or use credit cards.
• Accept bonuses that increase the product cost if not met.
• A more flexible risk analysis: fewer personal requirements such as economic ratios or job stability.
Fast, flexible and without bureaucracy
• No valuation required.
• No notary required (in most cases).
• You have the capital available in a few days.
• It does not affect the property registry.
What risks does it involve?
• If the value of your investments falls, the lender may ask you to extend the collateral or repay part of the loan.
• If you do not repay the loan, they could execute the secured assets.
💡 But don't worry: at Hipotea we analyse your case in detail and advise you personally so that you know if this option is right for you, or if it is better to opt for another solution.
When is it advisable to use a Lombard loan?
• When you want to invest in property without selling your portfolio.
• If you buy for rental and seek to optimise your tax situation.
• When you need quick liquidity without affecting your financial strategy.
• If you wish to renovate or improve a property without mortgaging it.
• When you seek an alternative more profitable than paying outright.
• If you value freedom, flexibility and profitability, with no strings attached.
At Hipotea, we analyse everything for you
At Hipotea we work with the main Lombard loan products on the market and have an expert team that:
- Analyses your investor profile
- Evaluates your assets and goals
- Advises you clearly, securely and effectively
If you are thinking of buying a property as an investment and do not want to mortgage your property or sell your funds, contact us.
At Hipotea we help you finance intelligently and keep your wealth growing.
