What is mortgage per-diem interest?
Per-diem interest is the approximate amount of interest that accrues on the outstanding principal for one day. A closing office can use it to estimate how a payoff changes when the anticipated closing or funding date moves.
Per-diem interest formula
The calculator uses principal × annual interest rate ÷ the selected day basis. For example, a lender may use a 365-day or 360-day convention. The official payoff statement controls when the lender's convention differs from the estimate.
Why the payoff can exceed the principal balance
A payoff statement can include interest through a specified good-through date plus payoff, wire, release, late or other lender charges. It can also include credits or adjustments that do not appear in a simple principal-balance calculation.
Mortgage payoff FAQ
Why is a payoff quote higher than the principal balance?
A payoff can include interest through the good-through date plus payoff, wire, release, late or other lender charges.
What is per-diem interest?
Per-diem interest is the approximate interest that accrues for one day on the unpaid principal under the selected day-count convention.
Should I use 360 or 365 days?
Use the convention stated by the lender or loan documents. This calculator supports both because lender methods can differ.