MTF Interest & Breakeven Calculator
This MTF calculator works out what a margin trading facility position costs you: the interest on the funded amount, your breakeven price, and how your return compares with paying cash. Enter the rate your broker charges. Runs in your browser; nothing is uploaded.
The 15% rate is only a placeholder. Use the rate on your own broker's MTF plan.
A worked example
Say you buy 1,000 shares at ₹100, a position of ₹1,00,000, paying ₹50,000 yourself while your broker funds the other ₹50,000 at 15% a year, and you hold for 30 days. The interest is ₹50,000 × 15% × 30 ÷ 365 = ₹616.44, so your breakeven sale price is ₹100 + ₹616.44 ÷ 1,000 = ₹100.62. If you sell at ₹110, the gain of ₹10,000 less ₹616.44 of interest leaves ₹9,383.56. On your own ₹50,000 that is a return of 18.77%, against 10% if you had paid the full ₹1,00,000 in cash. A fall in price would be magnified in the same way.
Understanding the calculation
- Interest
- Funded amount times the annual rate times days held divided by 365, on the amount the broker lends you. It accrues for every day you hold, so a longer hold costs proportionally more.
- Breakeven
- Buy price plus (interest + charges) divided by the quantity. The chart marks it where the MTF line crosses zero.
- Return on your own money
- Profit after interest and charges divided by the money you put in yourself. For a cash purchase the money you put in is the whole cost.
Common questions
What is a margin trading facility?
A margin trading facility (MTF) lets you buy shares by paying only part of the cost yourself, with your broker funding the rest and holding the shares as security. You pay interest on the funded amount for every day you hold the position, and you own the shares and receive any gains or losses on the full quantity.
How is the MTF interest worked out?
The usual method is the funded amount times your broker's annual MTF interest rate times the days held divided by 365. This calculator uses that method with the rate you enter. Brokers differ in how they count days, whether they add other fees, and how the rate changes with the amount funded, so check your broker's own terms.
What is the breakeven price?
It is the sale price at which the gain on your shares exactly covers the interest and charges you have paid, so you neither make nor lose money. It is higher than your buy price by the total cost divided by the quantity, and it rises every day you hold.
Why can MTF return more than buying with cash?
Because you put in less of your own money, the same rupee profit is a larger percentage of it. The catch is that losses are magnified the same way, and the interest is a cost that a cash purchase does not have, so a small or slow gain can end up worse than paying cash.
What happens if the price falls?
The broker requires you to maintain margin against the shares. If the price falls far enough that your margin drops below the required level, you may be asked to add funds or the broker may sell the position, which can lock in a loss. Check your broker's rules on margin calls.
What other MTF charges apply besides interest?
Only the buy and sell brokerage you enter here, which you can work out in the Brokerage and Tax Calculator. Separately, MTF usually carries a one-time pledge or activation charge from your broker, and taxes on the sale, so check your broker's tariff sheet for those since they are not included in this calculator.