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Closing cost calculator

Per Diem Interest Rate Calculator

  Loan Amount  
  Interest Rate  
  Annual Proration  
  Number of Days  
  Daily Interest  

Per diem is Latin for "for a day." So naturally, if you add the word interest, per diem interest means the amount of interest for one day.

Most mortgage lenders will charge you interest on a loan from the date of the closing (settlement date) to the end of the month. For example, if you close on the first day of the month, you will pay interest on the loan from the 1st until the last day of the month.

If you close on your loan on the 15th day of the month, and the month has 30 days, you will pay 15 days interest on the loan.

And one more example . . . if you close on the last day of the month, you will pay interest for one day, the day of closing. In most parts of the country, you pay interest on the day of closing.

Use the per diem interest calculator to estimate your per diem interest on your loan.

Rotating question mark  Frequently Asked Questions About Per Diem Interest

Q. Does paying mortgage early reduce interest?
A. Interest is calculated on the principal balance. If yoy reduce the loan amount, you will reduce the interest paid to the lender.

Q. How is prepaid interest calculated at closing?
A. The per diem formula is simple. Here's an example:
$100,000 (Loan amount) X 5% (Interest rate) = $5,000

Now divide the total interest cost by the number of days (i.e. 360 or 365). We'll use 365 days

$5,000/365 = $13.70 per day

Multiply the "per diem" by the number of days

Q. Is mortgage interest calculated daily or monthly?
A. The interest on a mortgage is calculated daily.

Q. Who pays prepaid interest?
A. The borrower pays the per diem interest