From this Reddit thread:

Hey all --- my partner and I are purchasing a home and weighing whether to take a securities-backed line of credit (SBLOC) for our $30k down payment, or just sell part of our investment portfolio.

Situation:

• Home price: ~$600k
• Down payment needed: $30,000
• Investment portfolio: ~$600k (mostly in taxable brokerage accounts, diversified stocks)
• Cash on hand: ~$50k
• Net worth: ~$650k
• No major debt
• Income: stable
• Goal: potentially keep investments intact, but avoid excessive interest or risk

We're considering:

1. SBLOC (securities-based line of credit)

• No capital gains taxes
• Funds quickly available
• Could keep the investments compounding
• Interest rate currently quoted around 6--7%
• Risk of margin call or forced liquidation if markets drop

1. Selling investments

• Realize some capital gains (still in long-term territory)
• Simpler, no repayment obligation
• Lose future compounding on that amount

What we're wondering:

• Is the potential investment upside worth the interest cost and risk of an SBLOC?
• Would you take the certainty of paying with cash, or try to preserve your investment exposure?
• Have you used an SBLOC for a real estate purchase? Regrets or good outcomes?

Would love to hear your thoughts---especially if you've run the math or have experience using SBLOCs in a home purchase context.