OSPF uses a simple formula to calculate the OSPF cost for an interface with this formula:

cost = reference bandwidth / interface bandwidth

The reference bandwidth is a value in Mbps that we can set ourselves. By default this is 100Mbps on Cisco IOS routers. The interface bandwidth is something we can lookup.

Let’s take a look at an example of how this works. I’ll use this router:

The router above has two interfaces, a FastEthernet and a serial interface:

R1#show ip interface brief
Interface                  IP-Address      OK? Method Status                Protocol
FastEthernet0/0            192.168.1.1     YES manual up                    up      
Serial0/0                  192.168.2.1     YES manual up                    up

Let’s enable OSPF on these interfaces:

R1(config)#router ospf 1
R1(config-router)#network 192.168.1.0 0.0.0.255 area 0
R1(config-router)#network 192.168.2.0 0.0.0.255 area 0

After enabling OSPF we can check what the reference bandwidth is:

Router#show ip ospf | include Reference
 Reference bandwidth unit is 100 mbps

By default this is 100 Mbps. Let’s see what cost values OSPF has calculated for our two interfaces:

Router#show interfaces FastEthernet 0/0 | include BW
  MTU 1500 bytes, BW 100000 Kbit/sec, DLY 100 usec

Router#show ip ospf interface FastEthernet 0/0 | include Cost
  Process ID 1, Router ID 192.168.1.1, Network Type BROADCAST, Cost: 1

The FastEthernet interface has a bandwidth of 100.000 kbps (100 Mbps) and the OSPF cost is 1. The formula to calculate the cost looks like this:

100.000 kbps reference bandwidth / 100.000 interface bandwidth = 1

What about the serial interface? Let’s find out: