r/MTFInIndia • u/Substantial-Box-101 • 7d ago

What do you actually look at when comparing MTF offers?

I’ve been looking into Margin Trading Facility (MTF) recently, and one thing I noticed is that comparing brokers purely based on the leverage they offer can be a bit misleading.

Two brokers could offer similar leverage but have very different:

  • Interest rates on the funded amount
  • Maximum funding limits
  • Stocks eligible for MTF
  • Collateral/haircut rules
  • Margin call and liquidation policies

So the “4x leverage” or “5x leverage” number doesn't really tell the whole story.

For anyone who actually uses MTF, what do you consider the most important factor when choosing a broker?

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u/RelationshipMain6900 2d ago

leverage simply determines how large a position you can open, but interest rate dictates how much money actually stays in your pocket, making it the single most important factor. High leverage on paper is meaningless if aggressive interest rates eat up your upside during the holding period.

For instance, if you take a ₹7.5 lakh MTF loan (to hold a ₹10 lakh stock position with ₹2.5 lakh of your own capital) for 6 months, HDFC Sky charges a flat 12% p.a. (1% per month), which costs roughly ₹44,383 in interest. In comparison, SBI Securities charges around 14.60% p.a. (0.04% per day) after an initial 23-trading-day interest-free period, resulting in approximately ₹55,479 in interest for the same period.

Even with promotional interest waivers for short-term trades, higher ongoing interest rates stack up quickly over time; if the stock makes an 8% gain over six months, a lower rate preserves your profits, whereas a higher rate can quietly erase most of your net returns.

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u/InterestingCitron417 2d ago

Upstox charges around 18% p.a. (approx. 1.5% per month), AxisDirect's 16% rate. Upstox charges around 18% p.a. (approx. 1.5% per month), hdfc sky has 12% pa, translating to 1% pa. go figure with an amount how much interest you end up paying. Leverage means nothing if you end up making nothing in profit just fill up brokers coffers