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Finance Calc Kit
Investments

Margin Interest Calculator

Calculate margin loan interest, total borrowing cost, and daily interest charges when trading on margin with customizable loan terms.

Margin position

$
%
%

Total margin interest

$32.88

30.0 holding days

Margin loan

$5,000.00

Your equity

$5,000.00

Daily interest

$1.10

Monthly interest

$33.33

Total borrowing cost

$10,032.88

$10,000.00 trade + $32.88 interest

Position cost breakdown

  • Equity$5,000.0049.8%
  • Borrowed$5,000.0049.8%
  • Interest$32.880.3%
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Understanding margin interest and borrowing costs

Margin trading lets you buy securities with borrowed funds from your brokerage. The upside is leverage: a smaller equity deposit controls a larger position. The downside is ongoing interest on the borrowed balance, charged daily and billed monthly. This calculator estimates those financing costs before you commit capital.

Enter your total trade value, the equity percentage you put up, the broker's annual margin rate, and how long you plan to hold the position. Results update instantly, including daily and monthly interest accrual. To model daily compounding on savings or deposits, use our compound daily interest calculator. For leveraged liquidation levels, see the margin call calculator.

Margin interest formula

Margin Interest=Loan Amount×r100×Holding DaysDays in Year\text{Margin Interest} = \text{Loan Amount} \times \frac{r}{100} \times \frac{\text{Holding Days}}{\text{Days in Year}}

The loan amount equals the purchase price minus your equity deposit. Most U.S. brokerages use a 365-day year; some commercial lenders use 360 days, which produces a slightly higher daily rate. Daily interest is the annual rate divided by the day-count basis, multiplied by the outstanding loan balance.

Worked example

Suppose you buy $10,000 of stock on 50% margin. Your equity is $5,000 and the broker lends $5,000 at 8% per year. Holding the position for 30 days at a 365-day convention:

  • Daily rate: 8% ÷ 365 = 0.0219% per day
  • Daily interest: $5,000 × 0.000219 = $1.10
  • 30-day total interest: about $32.88

Frequently asked questions

How often is margin interest charged?
Interest accrues daily on your settled debit balance. Most brokerages debit the accumulated amount once per month, typically on the last business day of the statement period.
Is margin interest tax deductible?
In the United States, investment interest expense may be deductible up to your net investment income if you itemize deductions. Rules vary by jurisdiction and account type. Consult a qualified tax advisor for your situation.
What is the difference between 365-day and 360-day conventions?
A 365-day year divides the annual rate by 365 to get the daily rate. A 360-day commercial year divides by 360, producing a marginally higher daily charge for the same stated annual rate.
Does margin interest reduce my buying power?
Yes. Accrued interest increases your debit balance, which raises future interest charges and can contribute to a margin call if collateral value falls.

Resources and references

The formulas and methods in this calculator were checked against these independent sources.