How Soon Is Your First Mortgage Payment Due?

A mortgage is a loan used to purchase a home, typically repaid over an extended period, such as 15 or 30 years. For many new homeowners, a common question arises regarding the timing of their initial mortgage payment. Understanding when this payment is due involves grasping how mortgage interest is calculated and applied, which differs from some other types of loans.

The Concept of Interest in Arrears

Mortgage interest is paid in arrears, meaning the interest portion of your payment covers the cost of borrowing money for the previous month. This contrasts with paying interest in advance, where interest is paid before it accrues. For example, a mortgage payment made on April 1st covers the interest accrued during March. It helps borrowers understand their interest obligations based on the actual time they have used the loan principal. Lenders typically provide detailed statements that itemize the interest paid, which helps in financial tracking.

Determining Your First Payment Due Date

Your first mortgage payment is due on the first day of the second full month following your closing date. This means there is usually a period of several weeks, or even up to two full months, between your closing and the first payment due date. For instance, if you close on January 15th, your first payment would be due on March 1st. This payment would then cover the interest for the month of February.

The timing of your closing within a month influences the amount of time until your first payment. If you close early in a month, for example, on May 3rd, your first payment would be due July 1st. Conversely, if you close late in the month, such as on May 25th, your first payment would still be due July 1st.

At closing, you will pay “per diem interest,” which covers the interest from your closing date through the end of that same month. This is because standard mortgage billing cycles begin on the first day of a month. For example, if you close on June 15th, you will pay per diem interest for the period from June 15th to June 30th at closing. This ensures the lender is compensated for the use of funds during that partial month. Because this partial interest is paid upfront, your first regular monthly payment will then cover the interest for the first full month after closing.

Receiving Your First Mortgage Statement

After your mortgage closing, you can expect to receive your first mortgage statement from your loan servicer. This statement is issued within a few weeks of closing, often around the 17th of the month prior to your payment due date. The statement will provide details, including the exact due date for your first payment, the total amount due, and the various payment methods available to you.

Review this initial statement to confirm details and familiarize yourself with the payment process. Your closing paperwork, including documents such as the Closing Disclosure and a “First Payment Letter,” will also contain information about your first payment due date and amount.