diff --git a/packages/math-utils/src/formatters/gho/index.test.ts b/packages/math-utils/src/formatters/gho/index.test.ts
index 0271c3a5..ce9e1766 100644
--- a/packages/math-utils/src/formatters/gho/index.test.ts
+++ b/packages/math-utils/src/formatters/gho/index.test.ts
@@ -36,8 +36,8 @@ describe('formatGhoData', () => {
     expect(result.userGhoDiscountPercent).toEqual(0.1);
     expect(result.userGhoAvailableToBorrowAtDiscount).toEqual(10000);
     expect(result.userDiscountTokenBalance).toEqual(100);
-    expect(result.userGhoBorrowBalance).toEqual(1.1000000063419584);
-    expect(result.userDiscountedGhoInterest).toEqual(0.9000000570776255);
+    expect(result.userGhoBorrowBalance).toEqual(1.9000000570776256);
+    expect(result.userDiscountedGhoInterest).toEqual(0.1000000063419584);
   });
 
   it('calculates the amount of GHO available to borrow at discount', () => {
@@ -53,8 +53,8 @@ describe('formatGhoData', () => {
     expect(result.userGhoDiscountPercent).toEqual(0.1);
     expect(result.userGhoAvailableToBorrowAtDiscount).toEqual(0);
     expect(result.userDiscountTokenBalance).toEqual(0.1);
-    expect(result.userGhoBorrowBalance).toEqual(1.1000000063419584);
-    expect(result.userDiscountedGhoInterest).toEqual(0.9000000570776255);
+    expect(result.userGhoBorrowBalance).toEqual(1.9000000570776256);
+    expect(result.userDiscountedGhoInterest).toEqual(0.1000000063419584);
   });
 
   it('properly formats user summary with GHO discount', () => {
diff --git a/packages/math-utils/src/formatters/gho/index.ts b/packages/math-utils/src/formatters/gho/index.ts
index 0cfce761..caba2b79 100644
--- a/packages/math-utils/src/formatters/gho/index.ts
+++ b/packages/math-utils/src/formatters/gho/index.ts
@@ -122,30 +122,30 @@ export function formatGhoUserData({
     userGhoAvailableToBorrowAtDiscount = 0;
   }
 
-  const userBalancePreDiscount = getCompoundedBalance({
+  const balance = getCompoundedBalance({
     principalBalance: ghoUserData.userGhoScaledBorrowBalance,
     reserveIndex: ghoReserveData.ghoCurrentBorrowIndex,
     reserveRate: ghoReserveData.ghoBaseVariableBorrowRate,
     lastUpdateTimestamp: Number(ghoReserveData.ghoReserveLastUpdateTimestamp),
     currentTimestamp,
   });
-  const accruedInterest = userBalancePreDiscount.minus(
+  const balanceIncrease = balance.minus(
     rayMul(
       ghoUserData.userGhoScaledBorrowBalance,
       ghoUserData.userPreviousGhoBorrowIndex,
     ),
   );
-  const discount = accruedInterest.multipliedBy(
-    1 - Number(normalize(ghoUserData.userGhoDiscountPercent, 4)),
-  );
-  const userBorrowBalance = userBalancePreDiscount.minus(discount);
+  const discountedAmount = balanceIncrease
+    .multipliedBy(ghoUserData.userGhoDiscountPercent)
+    .dividedBy(10000); // discount is in basis points
+  const userBorrowBalance = balance.minus(discountedAmount);
   return {
     userGhoDiscountPercent: Number(
       normalize(ghoUserData.userGhoDiscountPercent, 4),
     ),
     userDiscountTokenBalance: formattedUserDiscountTokenBalance,
     userGhoBorrowBalance: Number(normalize(userBorrowBalance, 18)),
-    userDiscountedGhoInterest: Number(normalize(discount, 18)),
+    userDiscountedGhoInterest: Number(normalize(discountedAmount, 18)),
     userGhoAvailableToBorrowAtDiscount,
   };
 }