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Lombard loan simulator: liquidity without selling your assets
A Lombard loan is a cash advance secured by a financial portfolio—assurance-vie, securities account, etc. It allows you to access liquidity without selling your assets, thus avoiding capital gains tax, while allowing your capital to continue earning.
No capital gains tax is triggered
Your assets stay invested and keep generating returns
As long as your portfolio's return exceeds the loan rate
The simulator
Simulate your Lombard loan
The simulator calculates your borrowing capacity based on the loan-to-value ratio and the interest cost. Your data is neither stored nor transmitted.
Lombard loan simulator
Raise liquidity by pledging your portfolio, without selling or triggering tax.
Indicative calculation, based on 2026 rules and the assumptions entered above.
Why
Why borrow against your portfolio rather than sell it
Selling assets to raise cash carries two hidden costs that are consistently underestimated: capital gains tax, which immediately eats into the sale proceeds, and the abrupt end of compounding, which deprives the capital of all its future years of growth. For established financial wealth, these two costs often far exceed the cost of a loan.
A Lombard loan gets round both pitfalls. The bank advances you a fraction of the value of your portfolio — the loan-to-value ratio, or LTV, often 50 to 70% depending on the type of assets — which you pledge as collateral. Your securities remain yours, keep their tax holding period and continue to generate returns. You pay only the interest; the principal is repaid at maturity, through a sale you choose to make or an inflow of cash. It is a liquidity management tool, not a consumer loan.
This mechanism underpins the "Buy, Borrow, Die" strategy used by large estates: you acquire assets, borrow against them to fund your projects without ever selling — and so without ever triggering tax — and the transfer on death wipes out unrealised capital gains. The Lombard loan is its central building block, but it is also a strategy that does not forgive carelessness.
What the calculation shows
The leverage effect of a Lombard loan — and the margin call risk that has to be faced squarely
As long as your portfolio earns more than the loan rate, leverage creates value: you invest or spend without disinvesting, and the gap between the return on your assets and the cost of borrowing is yours. At a 4% rate, for a diversified portfolio targeting more, the differential works for you. But this advantage rests on a return assumption that is never guaranteed: that is the first thing to remember.
The downside is real and must be stated plainly: if the value of the pledged portfolio falls, the bank can demand additional collateral — the margin call — or partially liquidate your assets, potentially at the worst possible moment, at the bottom of the market. An overly aggressive loan-to-value ratio then turns leverage into a trap: the fall forces you to sell exactly when you should not. This is the scenario any serious arrangement must anticipate.
A Lombard loan is a tool for experienced investors, to be used with a prudent loan-to-value ratio — below the maximum the bank offers — and a diversified portfolio that cushions shocks. The safety margin between the chosen ratio and the margin call threshold is what separates controlled leverage from unreasonable risk-taking. It must always be set up within an overall wealth strategy: funding a project, optimising estate transfer, a deliberate and properly sized Buy-Borrow-Die strategy.
Case study
Case study: Hélène, 61, established financial wealth, Paris
Hélène holds a diversified €500,000 portfolio that she does not want to sell — large unrealised capital gains, capital she wants to pass on. To fund a property purchase, she takes out a Lombard loan at a 50% loan-to-value ratio, at a 4% rate. Here is what the simulator shows:
| Indicator | Asset sale | Lombard loan (LTV 50%) | What it means |
|---|---|---|---|
| Liquidity raised | ≈ €250,000 | ≈ €250,000 | same amount available |
| Capital gains tax triggered | ≈ €30,000+ | €0 | no sale |
| Annual interest cost | — | ≈ €10,000/year | interest only, principal repaid at maturity |
| Capital still at work | €0 | €500,000 | portfolio preserved |
By borrowing rather than selling, Hélène avoids immediate tax on her capital gains and keeps her entire portfolio invested, where it continues to generate returns while she funds her project. As long as the portfolio earns more than the loan's 4%, leverage works in her favour.
The prudence condition is explicit: at a 50% loan-to-value ratio, Hélène keeps a comfortable safety margin before any margin call. Had she borrowed at 70%, a market correction could have triggered a demand for additional collateral, or even a forced sale. It is this prudent ratio, not the amount borrowed, that makes the arrangement safe.
In practice
Powerful leverage is only worth having within a clear framework
This simulator calculates your borrowing capacity and the interest cost. What matters is the sizing: the loan-to-value ratio chosen in light of your portfolio's volatility, the safety margin before a margin call, and how the Lombard loan fits into your overall strategy — financing a project, optimising the transfer of your wealth, a buy-borrow-die approach. A poorly calibrated Lombard loan turns an advantage into a risk; properly framed, it lets you finance a project without selling.
Balmont Conseil is a wealth management advisory firm based in Lyon, a member of ANACOFI-CIF, with no capital ties to any bank. Open architecture allows us to study the appropriate financing — repayment, interest-only or Lombard depending on the objective — and the safety margin of your pledged portfolio, before putting you in touch with our partner banks. Let's book an appointment to set up your arrangement and its safety margin.
Frequently asked questions
What clients ask us.
How does a Lombard loan work?
You pledge a financial portfolio — assurance-vie, securities account — as collateral, and the bank advances you a fraction of its value: the loan-to-value ratio, or LTV, often 50 to 70% depending on the type of assets. Your securities remain yours and continue to generate returns; you pay only the interest, with the principal repaid at maturity. It is a cash advance backed by your assets, which raises liquidity without selling or interrupting the compounding of your assets.
What is margin call risk?
It is the central risk of a Lombard loan, and it must be faced squarely. If the value of the pledged portfolio falls below a certain threshold, the bank can demand additional collateral — the margin call — or partially liquidate your assets, sometimes at the worst possible moment. A prudent loan-to-value ratio, below the maximum offered, and a diversified portfolio form the safety margin that separates controlled leverage from unreasonable risk-taking.
Why does a Lombard loan avoid capital gains tax?
Because borrowing is not selling. As long as you do not sell your assets, no capital gain is realised, so no tax is triggered: you obtain liquidity while keeping your portfolio's tax holding period and its compounding. This is the principle of the "Buy, Borrow, Die" strategy: acquire, borrow against your assets without ever selling, and let the transfer on death wipe out unrealised capital gains.
Who is a Lombard loan for?
For established, experienced investors with a diversified portfolio large enough to absorb market shocks. It is a liquidity management tool — funding a project, optimising an estate transfer — not a consumer loan. It requires a prudent loan-to-value ratio, a clear understanding of margin call risk and a place within an overall wealth strategy. Poorly calibrated, it becomes dangerous; properly sized, it is remarkably effective.
Why use Balmont Conseil for a Lombard loan?
Balmont Conseil is a wealth management advisory firm based in Lyon, a member of ANACOFI-CIF, with no capital ties to any bank. A Lombard loan combines a loan, a pledged portfolio and a margin-call risk that must be kept under control: we study the amount to borrow and the safety margin of your portfolio in your interest, then put you in touch with our partner banks.
