Margin Financing
How is margin interest charged?
Interest accrues daily on the outstanding balance at a published benchmark plus a tier spread, and is settled monthly in arrears.
Interest accrues daily on the balance you have actually drawn, and is settled monthly in arrears.
How the rate is set
The applied annual rate is the published overnight benchmark for your loan currency plus a contractual tier spread:
| Currency | Benchmark |
|---|---|
| GBP | SONIA |
| USD | SOFR |
| EUR | EURIBOR |
Because the benchmark is published independently by the Bank of England, the New York Fed and EMMI respectively, every rate change can be verified against a public source rather than taken on trust.
The calculation
Daily interest equals the balance multiplied by the annual rate, divided by 360. On a £250,000 balance at 5.95%, that is £41.32 a day and roughly £1,240 over a 30-day month.
What is not charged
There is no arrangement fee, no commitment fee on the undrawn portion of the facility, and no minimum monthly charge. If you draw nothing, you pay nothing. If you repay mid-month, accrual stops that day and there is no early repayment penalty.