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Budget calculator
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Wealth calculator
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The interactive calculator needs JavaScript. The guide below explains how margin loans, maintenance requirements and margin calls work.
How margin works
A margin loan lets you borrow from your broker against the investments in your account. Borrowing to invest magnifies results both ways: gains on the extra holdings add to your equity, losses come out of it, and interest is charged on the loan the whole time.
Net equity comes first
Net equity is what you would keep if the loan were repaid today: holdings minus margin debt. Gross investments look bigger when you borrow, so the calculator shows net equity right under the gross investments headline, along with profit after interest.
Reg T: 50% initial margin
Under the Federal Reserve's Regulation T you can usually borrow up to 50% of the value of eligible stocks you buy, and you need at least $2,000 of equity to borrow at all. Larger loans or draws are reduced to what is available.
Maintenance requirement
After you buy, FINRA requires equity of at least 25% of the account's market value. Many brokers set 30% or more, and they can raise it at any time. The calculator won't go below 25%.
What margin health means
Margin health is how far your holdings could fall, from that point, before equity drops below the maintenance requirement. The calculator shows its lowest and highest over the projection, plus today and the end. The lowest is the riskiest moment, often right after borrowing.
Margin calls and forced sales
If equity falls below the requirement, the broker issues a margin call and can sell your holdings without asking. The projection marks when that happens and assumes the broker sells enough to repay debt until equity is back above the requirement.
Interest adds up
Margin interest accrues daily and is usually charged monthly. Adding it to the loan means you pay interest on interest. The year-by-year table shows interest charged to date.
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Loan calculator
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The interactive calculator needs JavaScript. The guide below explains the payment formula, how amortization works and why extra payments save interest.
How loan payments work
Most loans are amortizing: every payment is the same, but the split changes over time. Early payments are mostly interest because the balance is large; later payments are mostly principal. The schedule above shows that split for every payment.
The payment formula
Payment = P × r ÷ (1 − (1 + r)−n), where P is the amount borrowed, r is the rate per payment and n is the number of payments. Like most US lenders, the calculator uses r = APR ÷ payments per year, rounds the payment to the cent and adjusts the final payment so the balance ends at exactly $0.
Why extra payments save interest
Interest is charged on the balance you still owe. Any extra amount goes straight to principal, so every later payment is charged less interest and more of it pays down the loan. Your required payment stays the same; the loan just ends sooner.
Bi-weekly vs monthly
Paying every two weeks means 26 payments a year. Here a bi-weekly loan is amortized on its own schedule, at APR ÷ 26 per payment. A plan that splits a monthly payment in half and pays it every two weeks is different: it adds about one extra monthly payment a year, which you can model with “Extra once a year”.
0% loans
With no interest, each payment is simply the amount borrowed divided by the number of payments, with any leftover cents settled in the last payment. Promotional 0% offers can switch to a high rate later, so check the terms.
Interest-only and balloon loans
An interest-only period keeps payments low at first, but the balance doesn’t fall, so the payments that follow are higher. A balloon loan uses a long schedule to set the payment, then the rest of the balance is due in one large payment years earlier.
Mortgage costs beyond the loan
Property tax, home insurance, PMI and HOA dues are part of what you pay each month but not part of the loan. PMI usually applies when you put down less than 20%, and ends automatically once the balance reaches 78% of the home’s original value.