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Per Diem Interest Calculator

Find the per-day interest owed at closing.

Result

$747.95
$62.33
12

How it is calculated

Daily interest is the principal times the annual rate spread evenly over 365 days: per diem = loan × rate ÷ 100 ÷ 365, and total interest = per diem × days. Loan is the outstanding principal in dollars, rate is the nominal annual interest rate in percent (6.5 means 6.5%) and days is the number of days to charge, for example the days between closing and the end of the month. The tool always divides by 365; there is no 360-day option, and lenders that use a 360-day year will quote a slightly higher daily figure. Interest is simple, not compounded. Zero days gives a total of zero while still showing the daily amount. A negative loan, rate or number of days gives no result, and neither does a fractional number of days such as 12.5; use whole days.

Worked example

You close on a $350,000 loan at 6.5% and owe interest for 12 days until the end of the month. Annual interest: 350,000 × 6.5 ÷ 100 = $22,750. Per diem: 22,750 ÷ 365 = $62.33 per day. Interest for 12 days: 62.3288 × 12 = $747.95. That is the amount shown for the odd days at closing, before the regular monthly payments begin.

Try this example →

Common mistakes

  • Typing 0.065 for a 6.5% rate. The rate is entered as a percent, so 0.065 would give a daily figure of about 62 cents.
  • Using the loan's monthly payment as the loan amount. Per diem interest is charged on the outstanding principal, not on the instalment.
  • Counting the wrong number of days, for instance including both the closing day and the last day of the month when your lender counts only one of them. Check the closing statement for the exact day count.
  • Expecting an exact match with a lender that uses a 360-day year. This tool divides by 365, so the result can differ by a few dollars on a large loan.
  • Entering a part-day such as 12.5. The days field takes whole days only and shows no result otherwise.

About this calculator

Per diem interest — also called 'daily interest' or 'odd-days interest' — is the amount of loan interest that accrues for a single day, used to prorate charges between a loan's closing date and the start of its first full payment period. Lenders calculate it by taking the loan's annual interest rate, dividing by 360 or 365 days depending on the day-count convention used, and multiplying by the outstanding principal.

This figure shows up on nearly every mortgage or loan closing statement: if you close mid-month, you typically owe per diem interest for the days between closing and the end of that month before your regular amortization schedule begins. Title companies, escrow officers, and loan officers use it to make sure the borrower pays exactly for the days the loan was actually outstanding — no more, no less. The calculation uses a 365-day year, so a lender that works with 360 days will show a slightly higher daily charge.

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