Making sure I am thinking about this correctly. On IB's SLB tool, I see a security with a fee rate of 3.0% and a rebate rate of -1.0%. Since the rebate is negative, I (as the borrower) would owe that to the lender correct? So in effect my cost for this short position is basically 4.0% annualized?
3% is the amount you pay to borrow the security, but you can also earn interest on your short sale proceeds. The rebate rate is IB's benchmark rate (currently 1.92%) minus the borrow rate. This is the maximum amount you could theoretically be earning net of borrow fees. However, in reality you'll earn a lower rate according to the table here. If your total short sales proceeds are less than 100k, you'll be paying the 3% and earning no interest.
Gotcha thanks for the help. So lets say in this example I short $10,000 worth of a security. I would basically owe the lender (0.03/360)*10,000 or 83 cents per day / $300 per year?
Correct. If you want to be picky, the 3% fee is based on the collateral amount, which will be at least $10,200. https://ibkr.info/node/1146