Interest Adjustment Date

Understand the interest adjustment date in Canadian mortgage financing — how it works, why it matters, and how to plan for the one-time cost.

Interest Adjustment Date

May 22, 2025


What is the Interest Adjustment Date?

The interest adjustment date is the day your mortgage term officially begins and interest starts accruing, often separate from your closing date.

Why the Interest Adjustment Date Matters in Real Estate

In Canadian mortgage financing, if your closing date doesn't align with your regular payment schedule, lenders charge interest for the days in between. This short period is the 'interest adjustment period.'

Key details:
  • Occurs between closing date and first payment
  • One-time interest-only payment may be required
  • Ensures full alignment with lender’s payment cycle

Failing to account for this cost can surprise buyers on closing. Lenders typically explain the interest adjustment amount in the mortgage commitment or funding letter.

Understanding the interest adjustment date helps buyers budget accurately and avoid confusion during their first mortgage payment cycle.

Example of an Interest Adjustment Date

A buyer closes on June 20, but regular payments start July 1. The lender charges an interest adjustment for the 10-day gap.

Key Takeaways

  • Aligns mortgage start date with payment schedule.
  • Results in one-time interest-only payment.
  • Typically occurs shortly after closing.
  • Common with fixed payment cycles.
  • Important for budgeting and clarity.

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