Does Mortgage Payment Date Impact Interest Charges?

[Dahlia]

Hello,
Let's say my mortgage payment is due on June 1 (because it is).

If I pay my mortgage on June 1- a few hundred dollars is taken off the principle and interest charges accrues on the lesser loan amount the next day.

If I pay my mortgage on June 15th- have I been accruing interest charges on a higher loan amount for the past 2 weeks?

Does this question make sense?

Basically, since mortgage interest charges are accrued on a daily basis...can a person save money over the long run by paying their payment earlier or on time versus a few weeks after the due date (but before late penalties are applied)?

[Jluke]

I think on June 1 the entire interest that would accumulate in the month of June until your July 1 payment is due is applied right away; not daily.

If you make an extra payment on June 15th that would go towards the principal and your interest would be recalculated for the month of a June. It doesn't matter when you make required payment as long as it is made by the due date. Interest is the same.

I am not 100% sure about this so I'm sure people will correct what I said. I am going off of what I remember when I had a mortgage

[Dahlia]

ok. I figured as much. Otherwise people would always be recommending you make your monthly payment sooner rather than later- to avoid higher daily interest charges.

But no one recommends that; so I guess it doesn't matter when you make your payment, as long as it is before late penalties are applied.

[Gailete]

My bank just changed their website and I can now see what is going on with all my accounts including the mortgage. What I am seeing is the interest amount varies depending on when the mortgage gets paid. I see this on our rental properties mortgage especially when I can add some extra principle. If you can see what is going with your mortgage on line, then you can see how things are going on. You can also ask the folks at your bank if it makes a difference. I know the sooner I pay my credit card bills the less interest I pay.

To be really sure you should ask your mortgage holder to be sure. I suspect the sooner you can make your payment the better it is in the long run. It will take awhile to see the results, but if you have an amortization schedule you should see the balance disappear and the amount of interest paid becoming less. Of course the banks and loan companies don't want people to know about that paying earlier instead of taking advantage of the 'grace period' is better for your wallet. But it one of the reasons that paying on your mortgage every two weeks became very popular several decades ago.

[AnnieG]

Maybe?

My amortization spreadsheet no longer agrees exactly with the bank (but the difference is slight). Due on 1st; pay on 15th (about 2 weeks early).

But I have also made significant principal only payments at various times and the spreadsheet is by month, not day.

[Gailete]

MY amortization sheets no longer agree also as they go out of whack with every extra payment. MY bank website shows what went to prinicple and what to interest. Because some months have 30 days ans some have 31 and thne Feb with 28 or 29, that one dy makes a difference. All I know is I want to make my payments ASAP! Once you get on a roll of paying things off then even those 'little amounts add up and the bigger your mortgage the bigger thoe 'little bitd will be.