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DeluxeXL t1_ixxej0x wrote

The reason that mortgage, property tax, HOA fees, etc. are "due on 1st and delinquent after XXth" is they don't want to be involved with your cashflow issues such as getting paid on the 1st but still waiting for paycheck to clear, ACH transfer times, post office delays, etc. Feel free to take advantage of their generosity. I personally delay payments to the same day as my credit cards' due date so I only have to watch my checking account one day per month. But you aren't getting much out of it.

Remember you are paying a mortgage every month for like, 15-30 years. You are only getting 13 extra days worth of interest once on the first time you switch from paying on the 1st to paying on the 14th. All of your subsequent payments are still one month apart.

It's like getting direct deposit 2 days early. You only enjoy the benefit once. All subsequent direct deposits are still one pay period apart.

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AlanPavio t1_ixxixqa wrote

Your last points are only true if you have a simple interest note, which the majority of mortgages are not. Most mortgages you pay the same amount of interest no matter when you pay it, except at payoff. The only thing that changes that is contributing additional to principal. The calculation for interest paid with each monthly payment is simply rate times UPB divided by 12.

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DeluxeXL t1_ixxkpu4 wrote

> Your last points are only true if you have a simple interest note

I was talking about interest in your HYSA for parking your money for the extra 13 days. You don't pay extra interest to mortgage for delaying payment to 14th.

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med780 t1_ixxp0lh wrote

My understanding is that the April 1 payment is paying for May. So even if you have it there by April 13th, that is still two weeks before what the payment is paying for.

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