How Do You Calculate Daily Interest On A Mortgage?
Determining the daily interest amount on your mortgage is helpful if you want to estimate a mortgage payoff amount. The daily interest charge, also referred to as “per diem,” is calculated from the current principal balance of your mortgage, not the original balance. With a calculator and a little information about your mortgage, you can calculate the daily interest in a matter of minutes. Determine the annual percentage rate, or APR, on your mortgage loan. You can find this on a recent billing statement or by contacting your mortgage company. Determine the remaining principal balance. Because the daily interest amount changes as your balance is reduced, it’s important to find out the current principal balance. The balance should be on your statement. You can also call your mortgage company to inquire. Divide the annual percentage rate by 365. Move the APR’s decimal two spots to the left to convert the rate into a fraction. For example, if your APR is 6.5, you would divide .065 by 365.
