Question:

How to calculate Per Diem interest?

Answer:

To calculate Per Diem interest, it is enough to know the daily interest rate of the mortgage. Per diem interest is the interest borrowers pay at closing before their mortgage loan adjusts to the lender's mortgage loan servicing cycle.

For example, if your mortgage payments will be due on the 1st and you close your loan on the 19th, you will owe per diem interest for 11 or 12 days.

Calculating Per Diem Interest

If you are closing on a mortgage loan of $100,000 at 6.25% you are paying (100,000 x 0.0625/12) equals $520.83 interest monthly. Or, daily interest for a 30-day month will be $17.36.

If you are closing on the mortgage loan on January 19, you will owe (11 x 17.36) equals $190.96 per diem interest at closing. Your first mortgage payment will be due on March 1st.

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Common misspellings: mortage and morgage