About the Margin Interest Calculator
This margin interest calculator shows how much a brokerage margin loan costs while you hold a leveraged position. Enter the total value of the position, how much of it you borrowed on margin, your broker’s annual margin rate and how many days you expect to keep the loan open. It returns total interest for the holding period, the daily accrual, the cost per 30 days and your starting equity percentage.
It is useful for active traders deciding whether a leveraged trade is worth it, long-term investors who keep a standing margin balance, and anyone comparing margin rates between brokers. The break-even figure tells you how much the whole position has to rise just to pay the interest — a quick reality check before you borrow.
Brokers accrue margin interest daily on the settled debit balance, usually using a 360-day year for US dollar loans, and post it to the account monthly. This tool uses simple daily interest on a constant balance; in practice the balance changes as interest is added and as you buy, sell or deposit cash.
With the default inputs, the total margin interest is $600.00. Change any value above to recalculate instantly.
How to use the margin interest calculator
- 1Enter the total market value of the position you hold or plan to buy.
- 2Enter the amount borrowed on margin (your debit balance).
- 3Enter your broker’s annual margin rate for that balance tier.
- 4Set how many days you expect to keep the loan open and the day-count basis.
- 5Review total interest and the break-even gain before placing the trade.
Formula and method
Margin interest is simple daily interest on the debit balance: the loan amount B times the annual rate r divided by the day-count basis D (360 for most US-dollar margin loans, 365 for some brokers and currencies), multiplied by the number of days d the loan stays open.
The break-even gain divides the interest by the total position value V, because the whole position — your cash plus the borrowed money — has to rise to pay the lender. Equity is V − B, and the equity percentage (V − B) ÷ V is what brokers compare with the maintenance requirement. The calculation assumes a constant balance; real accounts add accrued interest to the balance each month.
- B
- Margin loan (debit balance)
- r
- Annual margin interest rate (%)
- d
- Days the loan is outstanding
- D
- Day-count basis (360 or 365)
- V
- Total market value of the position
Worked examples
$20,000 margin loan at 12% for 90 days
Borrowing $20,000 at 12% on a 360-day basis accrues $20,000 × 0.12 ÷ 360 ≈ $6.67 per day. Over 90 days that is $600, or $200 per 30 days. Because the full $50,000 position must pay the interest, it needs to rise 1.2% just to break even.
$100,000 loan at 8.5% held for a full year (365-day basis)
On a 365-day basis, $100,000 at 8.5% costs about $23.29 a day and exactly $8,500 over the year. With a $200,000 position, the investments must return 4.25% before you make anything on the borrowed half.
Short-term trade: $5,000 at 13.5% for 10 days
A $5,000 margin loan at 13.5% accrues $1.875 per day on a 360-day basis, so a 10-day trade costs $18.75 in interest — a 0.125% hurdle on the $15,000 position.
Frequently asked questions
How is margin interest calculated?+
Brokers multiply your daily settled debit balance by the annual margin rate divided by 360 (or 365), add that up every day, and charge the total to your account once a month. Rates are usually tiered, so larger balances get a lower rate.
Is margin interest charged daily or monthly?+
It accrues daily on the balance you owe each day, but is typically posted to the account monthly. Because unpaid interest is added to the debit balance, it effectively compounds monthly if you do not pay it down.
Is margin interest tax deductible?+
In the US, margin interest used to buy taxable investments can be deducted as investment interest expense on Form 4952 if you itemize, limited to your net investment income. Interest on loans used to buy tax-exempt bonds is not deductible.
What is a margin call?+
If your equity falls below the maintenance requirement — commonly 25% under FINRA rules and often 30% or more at brokers — you must deposit cash or securities, or the broker can sell positions without asking you first.
How can I reduce margin interest?+
Pay down the debit balance with cash or by selling positions, compare brokers (rates vary widely), negotiate if you have a large account, or use a securities-based line of credit, which sometimes charges less than standard margin.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.