Mortgage Due Dates 101

September 11, 2012 54 Comments »
Mortgage Due Dates 101

If you recently took out a mortgage, or have been thinking about financing a piece of property, you may be wondering when your mortgage payments will be due each month, among other things (like how late Ikea is open).

Well, mortgage payments are generally due on the first of the month, every month, until the loan reaches maturity, or until you sell the property.

So it doesn’t actually matter when your mortgage funds – if you close on the 5th of the month or the 15th, the pesky mortgage is still due on the first.

The difference is when the first mortgage payment is due, which I’ve explained in my when mortgage payments start post.

Mortgage Due on the 1st, Late on the 16th?

Most people probably know that mortgage payments are due on the 1st of the month, but many loan servicers (those who collect your payments) will allow you to pay 15 days “late” each month.

So even though your mortgage payments are technically due on the first each month, you can pay as late as the 15th every month without any kind of penalty.

This is known as the “mortgage grace period,” similar to other grace periods you see with all types of other loans.

Some “savvy” consumers may even set up automatic payments to be sent mid-month, instead of paying on the first to maximize cash flow.

But this can be a dangerous game, especially if your mortgage payment doesn’t make it to the servicer on time, for whatever reason.

Nowadays, this may be less of a problem thanks to speedy and generally reliable online payments, but it’s still a risk not worth taking.

The servicer may also harass you if you consistently pay late into the grace period.

What If I Pay My Mortgage Late?

If you play this “pay at the last minute game” each month, you could eventually get burned and wind up paying a mortgage late fee.

These fees can vary, but are often pretty steep. We’re not talking a $20 late fee and a slap on the wrist.

We’re talking a percentage of the mortgage payment, such as 5%. So if your monthly mortgage payment is $3,000 a month, that’s $150 smackers.

And if you wait too long to make a payment, it could eventually be reported to the credit bureaus, which will really hurt.

The result could be a substantial credit score ding, and more difficulty obtaining subsequent mortgages in the future.

After all, lenders aren’t too fond of homeowners who don’t make their mortgage payments on time.

What If I Pay My Mortgage Before the Due Date?

Okay, so we know paying late isn’t too smart, but what about paying the mortgage before the due date?

You might be thinking, “Hey, I can save money on interest if I make my payments on the 20th or 25th of each month, instead of the first of the next month.”

Not the case. The servicer may accept your payment on that date, but it won’t mean you’ll pay less interest.

The interest is already figured out for the month using the previous month’s balance, so it doesn’t matter if you pay a few days early.

This differs from credit cards and other types of loans, such as HELOCs, where the interest is calculated daily.

If you actually want to pay less in interest on a traditional mortgage, you need to make extra principal payments.

So if you pay an additional $100 on top of your monthly mortgage payment, your loan balance will be $100 lower for the subsequent month, and that means less interest paid over the life of the loan.

This will also reduce the loan term, meaning your mortgage will be paid off in less time.

Just note that the monthly mortgage payment will stay the same, regardless of whether you make larger payments for a few months here and there.

Tip: Be careful when making extra principal payments. If you send in a payment that is below the monthly mortgage payment, such as two smaller biweekly payments, even if they exceed the total amount due, they may not be credited properly.

All said, speak with your loan servicer once you take out your mortgage to ensure your payments are processed properly. Rules vary and it’s best to get all the answers straight from the horse’s mouth.

(photo: adactio)


  1. Colin Robertson July 7, 2017 at 12:13 pm -


    Not sure about legality, but it certainly sounds frustrating. You may want to clarify in the future when sending extra payments. Some borrowers will write on the check something like “pay to principal balance” so the lender knows to apply it there instead of just holding it and applying it to the subsequent month’s payment.

  2. Olga July 3, 2017 at 10:49 am -

    I have mortgage with PHH. Just noticed that a few years ago they started applying my extra payments to the next month due date. It used to be current month for a while so I stopped checking on it. They did it without notified me. Is this legal to do? It already cost me a few hundreds of extra interest paid.
    Customer service tried to convince me that it does not matter how they apply the extra payment.

  3. Gail May 3, 2017 at 8:54 pm -

    Does anyone know of any mortgage companies that will take any payment received and apply it to the loan IMMEDIATELY? I’m looking to pay every 14 days, but all companies I’ve found will only apply payments to the loan once a month. Thank you!

  4. Colin Robertson February 5, 2017 at 11:14 am -


    You’ll have to ask the loan servicer directly how they handle multiple payments…do they consider the first payment “short” and reject it, or set it aside as insufficient? Or do they allow multiple payments as long as they add up to the full payment amount and then process it? Best to ask your servicer directly to avoid any unwanted surprises.

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