Per Diem Mortgage Interest Calculator Over 30 Years

Per Diem Interest Formula:

\[ \text{Per Diem Interest} = \frac{\text{Loan Amount} \times \text{Interest Rate}}{365} \] \[ \text{Total Interest} = \text{Per Diem Interest} \times \text{Number of Days} \]

Per Diem Interest:

Total Interest Over Period:

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1. What is Per Diem Mortgage Interest?

Per diem mortgage interest is the daily interest charged on a mortgage loan. It represents the amount of interest that accrues each day on your loan balance before any payments are applied.

2. How Does the Calculator Work?

The calculator uses the following formulas:

\[ \text{Per Diem Interest} = \frac{\text{Loan Amount} \times \text{Interest Rate}}{365} \] \[ \text{Total Interest} = \text{Per Diem Interest} \times \text{Number of Days} \]

Where:

Loan Amount — The principal amount of the mortgage
Interest Rate — The annual interest rate (as a percentage)
365 — Number of days in a year (some calculations use 360 days)
Number of Days — The period over which to calculate total interest

Explanation: The calculator first determines the daily interest amount, then multiplies it by the number of days to get the total interest over that period.

3. Importance of Per Diem Interest Calculation

Details: Understanding per diem interest helps borrowers estimate closing costs (for pre-paid interest), compare loan options, and plan for early payoff strategies.

4. Using the Calculator

Tips: Enter the loan amount in dollars, interest rate as a percentage (e.g., 3.5 for 3.5%), and the number of days (30 years = 10,950 days). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why calculate per diem interest?
A: It helps estimate daily interest costs, understand how much interest accrues between payments, and calculate prepaid interest at closing.

Q2: Is per diem interest the same as daily interest?
A: Yes, per diem is Latin for "per day," so per diem interest means daily interest.

Q3: Does this account for amortization?
A: This simple calculation assumes the principal remains constant. For amortizing loans, the actual per diem decreases slightly each day as principal is paid down.

Q4: Why 365 days instead of 360?
A: Most mortgages use actual/365 interest calculation, though some commercial loans use 360-day years.

Q5: How accurate is this for 30-year mortgages?
A: It provides a good estimate, but actual amortization schedules will show slightly decreasing per diem interest over time as principal is paid down.