Per Diem Interest
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
Per-diem interest is the daily interest charged on a mortgage from the day funds are disbursed at closing through the end of that month.
What Per Diem Interest means
Mortgage interest is paid in arrears, so your first regular payment does not start until the month after closing. To bridge the gap, the lender collects interest for each day left in the closing month. Closing early in the month means more per-diem days collected; closing near month-end means fewer.
Florida example
Closing a $300,000 Florida loan at 6.5% on June 5 leaves 26 days in the month. At roughly $53.42 a day, that is about $1,389 in prepaid per-diem interest collected at the table.
What it is
Per diem interest is the daily interest charged from your closing date to the end of that month. It covers the days before your first full payment.
It is a normal part of your cash to close.
Why it matters
Closing later in the month means less per diem interest to pay up front. Timing can trim your closing costs.
We help you time closing to save. Reach out and we will show how the date affects your costs.