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Assume two banks offer a $100,000 mortgage at 6% annual interest for 30 years with payments due monthly. One bank assumes each month has 30 days. The other bank uses the actual number of days in each month. Is the amortizing payment different for the two loans? If so, what is the difference in how the payment is calculated?

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I’m not aware of any loan product that has interest calculated on actual days in a month. If they did that you would have 4 different interest amounts, one for each month that has 31,30,29, and 28 days. Of course as soon as I say that someone will point out a case where it happens.

If it did exist yes the interest amount and likely payments would be different for each. Though even if the interest were different each month the payment could still be evened out to be the same every month.

  • They're called daily simple interest mortgages investopedia.com/terms/s/simple_interest_mortgage.asp – user348514 May 13 at 3:09
  • @user348514 just because something exists, doesn't mean it's what you will actually ever be offered one. Do simple interest car loans exist, sure; can you get one from Mercedes? no. – quid Jun 11 at 20:16

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