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Are these just different names for the same thing? Lending Management Software company told me their software does not do 30/360, but could do 360/360 which would be the closest match. I am thinking it is just an uncommon naming convention, and they are the same thing.

Here is what the software (lending management software) told me: Here is an excerpt from our User Guide: “the per diem interest is the annual interest divided by the number of payments in a year, divided by the number of days in the current payment period. This interest year is inherent in the amortizing equations. For each interest year, you may calculate the APY by multiplying the APR by the factor listed in the table below (not accounting for fees and charges)."

and

"360/360 - (Prin x Int)/(# of annual payments x # of days in current payment period)"

  • Where are you seeing 360/360? The only reference I can find online shows that they are the same. – D Stanley May 5 '18 at 14:13
  • Software company told me their software does not do 30/360, but could do 360/360 which would be the closest match. I am thinking it is just an uncommon naming convention, and they are the same thing. This paper for example seems to indicate they are two names for the same thing: business.nasdaq.com/media/day-count-fractions_tcm5044-53854.pdf But like you say, it is hard to find any info on 360/360. Wikipedia only has 30/360. – richarddddddddd May 6 '18 at 18:53
  • Based on what I have found they are the same thing, however to be certain you could ask the company for their definition of 360/360 and see if it matches the 30/360 convention. – D Stanley May 7 '18 at 13:33
  • thanks D Stanley for following up. Here is what the software (lending management software) told me: Here is an excerpt from our User Guide: “the per diem interest is the annual interest divided by the number of payments in a year, divided by the number of days in the current payment period. This interest year is inherent in the amortizing equations. For each interest year, you may calculate the APY by multiplying the APR by the factor listed in the table below (not accounting for fees and charges)." and "360/360 - (Prin x Int)/(# of annual payments x # of days in current payment period)" – richarddddddddd May 7 '18 at 23:44
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    This is quite clear, and I can answer if it is taken off hold. Lack of understanding of the topic should not mean that a topic is closed because it is "unclear." – Jacob May 9 '18 at 11:49
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For all intents and purposes, 360/360 and 30/360 are the same thing.

The only difference between a "30/360" day count and a "360/360" day count is the name. Many real estate firms/agents use "360/360" when talking mortgages, but most investors and financial institutions use "30/360" even when talking about the same type of investment (ABS, MBS, CMO).

A 30/360 day count refers to how to calculate accrued interest. You take the interest rate (we'll say 5%) and divide it by 360 to get the daily accrual rate (5% / 360 = 0.014%). This daily rate is then multiplied by 30 to get the monthly accrual rate (0.014% * 30 = 0.417%). Each month, regardless of how many actual days are in that month, this monthly accrual rate is used to calculate interest owed.

A.CRE published a great article on day count conventions that explains the most common day counts in detail.

  • the factor in the OP referenced (1//(# of annual payments x # of days in current payment period)) looks different than 30/360. Suppose the "current payment period" is March with 31 days? Or A semi-annual bond whose coupon period is Mar-Aug (184 days)? It's not a huge difference but it is different than 30/160. – D Stanley May 14 '18 at 13:10
  • Jacob, thank you for your insight. @DStanley I think you hit the nail on the head. That bit you mentioned seems to mean that the per diem calculation is a little different in months ending in 28, 29, or 31 days. It seems this company says "360/360" but are using some non-standard method? – richarddddddddd May 15 '18 at 0:45

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