How is margin borrowing interest charged, and is it part of the trading fee?

Two costs in every margin trade

• Trading fee — the maker or taker fee on each order, the same kind of fee as an ordinary spot trade, charged on the value of the fill.
• Borrowing interest — charged on the amount you borrowed (your liability) for as long as the loan is open, whether the trade is winning or losing.

The fee is paid twice per round trip, once in and once out. Interest keeps running with time, so on a margin position held for days it can grow larger than the fees.

How the hourly charge is calculated

OKX records interest every hour on the hour, starting from 0:00, on the liability outstanding at that moment. Its formula is: liability × the currency's daily interest rate ÷ 24 = interest for that hour. Its own example: borrow at 22:55 and the first interest is recorded at 23:00; repay at 22:57 and that borrowing incurs no interest. The current daily rates are shown in the app under leverage lending. OKX's interest-free quota does not help here — it applies only to unrealized futures profit and loss in the unified account's multi-currency mode, not to margin borrowing.

MEXC's margin guide describes simple interest at an hourly rate, counted from the moment the loan succeeds: interest is charged once when the loan is made and then every hour after that, and less than 60 minutes counts as a full hour. You repay principal and interest in the currency you borrowed, and the real-time hourly rate is shown in the Loan window on the trading screen. The guide dates from 2022, so check the current Loan window before you borrow.

The practical difference: a very short borrow-and-repay costs nothing on a check-on-the-hour model if it doesn't cross the hour, but costs at least one full hour on a charge-at-borrow model.

Margin interest vs perpetual futures funding

A perpetual futures position doesn't borrow anything, so it has no interest. Its holding cost is funding, which traders on opposite sides pay each other every few hours, and which can run in your favour as well as against you (what a funding fee is). Margin interest only ever runs against the borrower. Whether a leveraged position is cheaper to hold as a margin trade or as a perpetual depends on the interest rate of the borrowed asset versus the funding rate at the time — and on how long you hold, the same trade-off covered in funding fee vs trading fee.

Keeping interest down

• Repay as soon as the position is closed — interest runs on the liability, not on the open trade.
• On an hour-checked model, closing and repaying before the next full hour avoids that hour's charge; on a charge-at-borrow model, the first hour is paid the moment you borrow.
• In MEXC's auto mode, the system borrows and repays for you; its guide notes that cancelling an unfilled or partly filled order automatically repays the borrowed funds to reduce interest.

Does a fee rebate cover margin interest?

No. A fee rebate is a share of the trading fees you pay; interest is a charge for borrowing, not a trading fee, and is never part of a rebate. The buy and sell orders in a margin trade do pay trading fees, but which products an exchange counts toward its affiliate commission is set by its own program, and rebates are calculated from the commission the exchange reports — check your rebate dashboard after your first margin trades rather than assuming. See what a fee rebate is.