Per Diem Interest Calculator

What is Per Diem Interest?

When you take out an FHA mortgage, your first full monthly payment usually isn't due until the second month after you close. For example, if you close in January, your first mortgage payment will typically be due on March 1. Similarly, if you close in March, your first payment comes due in May.
This happens because mortgage interest is paid in arrears - meaning each payment covers the previous month's interest.

Understanding this timeline is key, and a per diem interest calculator helps you plan by showing how much daily interest you'll owe from your closing date through the end of the month before regular payments begin. Think of per diem interest as an interest-only payment for the closing month.

How This FHA Per Diem Calculator Works:

This calculator shows how much daily interest you'll owe from your closing date through the end of the month. It determines your total per diem interest based on your loan amount, interest rate, and the exact number of remaining days in the month - including the day you close. You'll also see how both your rate and the number of days affect your overall closing costs. For added precision, you can choose a 360- or 365-day year, depending on how your lender calculates interest. This flexibility helps you plan your closing date more effectively and potentially reduce upfront expenses.

Smart Tips for FHA Home Buyers:

• Closing later in the month can help lower your per diem interest (and closing costs), since every earlier day adds to the total you'll owe.
• Choose the correct year‑day basis (360 or 365) to match your lender's calculation method for the most accurate results.
• Remember that the day you close is always included when figuring out daily interest charges.
• Factor your estimated per diem interest into your cash‑to‑close so you're fully prepared for the final payment.
• If you're trying to minimize upfront costs, talk with your lender or agent about scheduling your closing toward the end of the month