A margin loan is secured by an investor’s own brokerage holdings, letting them borrow against securities they already own.
How it works
Margin balance times the annual rate, times days held divided by 365, gives the interest cost.
What this does not include
This doesn’t include the risk of a margin call if the account’s value falls — this site’s separate margin-call-price calculator addresses that specific risk.
How to use this calculator
- Enter the margin balance, annual rate, and days held.
A worked example
A $50,000 margin balance at 9% annual rate held for 90 days: interest = 50,000 × 0.09 × (90/365) = $1,109.59.
What the variables mean
| Variable | Meaning |
|---|---|
| Margin balance | Amount borrowed against the brokerage account |
| Margin rate | Annual interest rate charged on the borrowed amount |
| Days | Number of days the balance was held |
Edge cases worth knowing
Margin interest accrues daily, not monthly — which is why the formula divides the annual rate by 365 rather than by 12, and holding a balance for a handful of extra days genuinely adds to the cost.
Zero days held means zero interest, a valid result the calculator declines to show since there’s nothing meaningful to report over no elapsed time.
Frequently asked questions
How is margin interest different from a regular loan?
It’s secured directly by brokerage account holdings and typically accrues daily, charged monthly, without a fixed repayment schedule as long as the account maintains sufficient equity.
Why do margin rates vary between brokers?
Rates are set independently by each brokerage and often tiered by balance size — larger margin balances frequently qualify for lower rates.
Can margin interest be tax deductible?
Investment interest expense, including margin interest, may be deductible up to net investment income, subject to specific IRS rules and itemization requirements.
