Net Borrow APY Calculator
The headline borrow rate on a DeFi lending protocol is not always the rate you pay. Many protocols hand back reward tokens to borrowers, lowering the effective cost. This calculator subtracts the borrowing reward APY from the gross borrow APY to give your net borrow APY, then applies it to the amount borrowed to show the annual interest in dollars. Use it to compare the true cost of borrowing across protocols.
Net borrow APY formula
Net borrow APY = gross borrow APY - borrow reward APY
Annual interest cost = amount borrowed * net borrow APY / 100
A positive net APY is a cost; a negative net APY means the incentives exceed the interest, so the position pays you while it lasts.
Reading the result
- Net borrow APY is the effective annual rate after incentives.
- The dollar cost applies that rate to your borrowed amount for one year.
- A negative net APY shown as a negative cost means you are paid to borrow.
- Reward rates and token values move, so recheck before relying on the net figure.
Net borrow APY: frequently asked questions
What is net borrow APY?
Net borrow APY is the effective annual cost of a loan after any reward or incentive tokens you earn for borrowing are subtracted from the gross borrow APY. Some protocols pay incentives to borrowers, which can lower, or in rare cases more than offset, the interest you pay.
How is net borrow APY calculated?
Subtract the borrowing reward APY from the gross borrow APY. If the gross borrow rate is 6% and you earn 2% in borrow incentives, the net borrow APY is 4%. A negative result means the incentives exceed the interest, so borrowing pays you, though such conditions rarely last.
What is the annual interest cost in dollars?
Multiply the net borrow APY by the amount borrowed. A 4% net borrow APY on 10,000 borrowed is 400 per year. This calculator shows both the net rate and the dollar cost so you can compare the true expense across protocols.
Are reward incentives reliable?
Incentive programs are often temporary and the reward token's value can fall, so a quoted reward APY may not persist or may be worth less when you claim it. Treat the net figure as a snapshot and recheck the incentive rate regularly.
Sources and method
- Net borrow APY is the gross borrow rate less the reward APY, a direct subtraction. All inputs are user-editable; no protocol rate is hardcoded.
- U.S. Consumer Financial Protection Bureau: consumerfinance.gov on the cost of credit and APR.
Reviewed by the CalculatorHub team, edited by James Graham, 19 June 2026. See our methodology.