No, not all mortgage payments are due on the first, though most lenders set the first as the standard default date with a fifteen-day grace period.
You just signed the mountain of paperwork. You have the keys. Now you face the reality of the monthly bill. Most homeowners assume every loan follows the same strict calendar, but flexibility exists if you know where to look. While the industry standard pushes for the first of the month, your actual obligation depends on your loan terms, your closing date, and specific payment arrangements set up with your servicer.
Are All Mortgage Payments Due On The First?
The short answer is no, but the industry operates on a default setting. Lenders prefer the first of the month for standardization. It aligns with how they calculate interest. Mortgages typically charge interest in arrears. This means the payment you make on February 1st covers the interest that accrued throughout January.
Because months vary in length, lenders use standardized formulas to keep billing consistent. Setting the due date to the first simplifies this massive accounting task for banks handling millions of loans. However, this does not mean the money must leave your hand on that specific day to avoid a penalty.
Most contracts include a “grace period.” This window usually extends 15 days past the due date. If your payment arrives by the 15th, the lender considers it on time. No late fees apply. No negative marks hit your credit report. For many households, this effectively makes the “real” due date the 15th, even if the statement says the 1st.
Why Lenders Choose The First
Investors buy mortgages in bundles on the secondary market (like Fannie Mae or Freddie Mac). These investors expect payment flows on a predictable schedule. The first of the month creates a uniform timeline for these securities. If every borrower picked a random day, the complexity of bundling these loans would skyrocket.
Interest calculations also rely on this timeline. Daily interest charges accrue based on the unpaid principal balance. A standardized due date allows the servicer to apply your payment to the principal and interest correctly without manually adjusting for odd payment dates every single month.
Understanding The Mortgage Grace Period
The grace period serves as your safety net. It exists because mail delays happen, and paychecks do not always align perfectly with the first. You do not need to call the bank to use this time. It applies automatically.
If your due date is September 1st, you can pay on September 10th without consequence. The lender credits the payment as if it arrived on the 1st. You simply keep the money in your account longer. However, you must respect the hard cutoff.
If you pay on the 16th, the rules change instantly. The lender assesses a late fee. This fee usually equals 4% to 5% of your total monthly payment (principal and interest). On a $2,000 payment, a $100 fee applies just for being one day past the grace period.
This table outlines how different loan types handle these dates and fees.
| Loan Type | Standard Due Date | Grace Period Ends | Late Fee Percentage | Credit Reporting Date | Weekend Rule | Partial Payments |
|---|---|---|---|---|---|---|
| Conventional | 1st of Month | 15th of Month | 5% of P&I | 30 Days Late | Next Business Day | Usually Rejected |
| FHA Loan | 1st of Month | 15th of Month | 4% of P&I | 30 Days Late | Next Business Day | Usually Rejected |
| VA Loan | 1st of Month | 15th of Month | 4% of P&I | 30 Days Late | Next Business Day | Usually Rejected |
| USDA Loan | 1st of Month | 15th of Month | 4% of P&I | 30 Days Late | Next Business Day | Usually Rejected |
| Private/Hard Money | Varies | 0–10 Days | Varies (High) | Varies | Strict | Accepted sometimes |
| HELOC | Varies | 10–15 Days | Fixed or % | 30 Days Late | Next Business Day | Interest Only OK |
| Subprime | 1st of Month | 0–15 Days | 5% + | 30 Days Late | Strict | Rejected |
Changing When Your Mortgage Payment Is Due
You might hate paying on the first. Perhaps you get paid on the 10th. You can request a date change, but results vary. Lenders are not required to say yes. The secondary market guidelines discussed earlier make them hesitant to alter the legal contract.
Some servicers allow you to move the date permanently. You usually cannot move it far—perhaps to the 5th or the 10th. Moving it to the 20th implies you will constantly use the grace period, which lenders consider risky. If they approve the change, you will likely pay “per diem” (daily) interest for the gap days during the transition month.
You must contact your servicer directly. Ask specifically if they allow “due date modification.” Do not confuse this with “recasting” or “refinancing.” You simply want to shift the administrative due date. If they refuse, you must rely on the grace period as your flexible buffer.
How Bi-Weekly Payments Change The Schedule
One specific setup breaks the “due on the first” rule completely. Bi-weekly payment plans involve paying half your mortgage every two weeks. Since there are 52 weeks in a year, you make 26 half-payments. This totals 13 full payments per year.
In this scenario, your specific due dates depend on when you start the plan. You might pay every other Friday. The lender holds the funds in a suspense account until they have a full payment to apply. This method accelerates your payoff timeline significantly.
Third-party companies often charge fees to set this up. Avoid them. Most servicers allow you to set up bi-weekly drafts for free. You simply sign a form authorizing them to pull half the amount every two weeks. This aligns your largest bill with your paycheck cycle, removing the stress of a single large sum leaving your account on the first.
The First Payment After Closing Explained
New homeowners often get confused about their very first bill. You almost never pay the first month you own the home. If you close on January 15th, your first payment is not due February 1st. It is due March 1st.
This happens because of “prepaid interest.” At closing, you pay the daily interest costs for the remainder of the current month (January 15th through 31st). This covers you until the month ends. The mortgage then begins its standard accrual cycle in February. Since interest is paid in arrears, the bill for February’s interest drops on March 1st.
This “skipped” month provides a massive relief for buyers. It gives you time to cover moving costs, buy furniture, or replenish savings depleted by the down payment. You should verify your “First Payment Date” letter in your closing packet. It states the exact day explicitly.
Late Fees And Credit Score Impacts
Missing the first implies utilizing the grace period. Missing the grace period triggers financial pain. The late fee is the immediate consequence. As noted in the table above, 4-5% is standard. On a large jumbo loan, this fee can exceed $200.
Credit reporting acts as the severe hammer. Lenders generally do not report you to credit bureaus until you are full 30 days past the due date. If your payment is due June 1st, and you pay June 20th, you pay a fee, but your credit score remains safe. If you pay July 2nd, the lender reports a “30-day late” mark.
According to the CFPB mortgage servicing rules, servicers must follow strict guidelines on how they handle these delinquencies. They cannot start foreclosure immediately, but a single 30-day late notice can drop a high credit score by over 100 points. The damage lingers for seven years.
Are All Mortgage Payments Due On The First If You Refinance?
Refinancing creates another exception to the rule. When you refinance, you effectively pay off Loan A with Loan B. The process mirrors the buying timeline. You get a break in the payment cycle.
If you close a refinance on May 10th, the new loan pays off the old loan. You paid interest on the old loan through the payoff date. You pre-pay interest on the new loan for the rest of May at closing. Your first payment on the new loan lands on July 1st. You skip June.
Borrowers use this strategy to free up cash flow during tight months. However, you are not truly “skipping” a payment in terms of value. You are simply deferring the principal reduction and paying the interest upfront at the closing table. The math always catches up.
Auto-Pay Traps To Watch For
Automation fixes the “due on the first” anxiety, but it creates new risks. If you set autopay for the 1st, and the 1st falls on a Sunday, the draft might not happen until Monday. Lenders anticipate this. It counts as on time.
The danger arises if you set autopay for the 15th—the last day of the grace period. If the 15th is a Sunday or a holiday, the payment might process on the 16th. This triggers the late fee. The computer system does not care that you “intended” to pay within the grace period.
Always set autopay at least 2-3 days before the grace period ends. Target the 10th or 12th. This leaves room for bank errors, holidays, or insufficient fund notifications. You have time to fix the problem before the 4% penalty hits.
This second table details the timeline of risk if you push your payment logic too far past the first.
| Day of Month | Status | Financial Consequence |
|---|---|---|
| 1st | Due Date | $0. Ideal payment timing. |
| 2nd – 15th | Grace Period | $0. No fees. No calls. |
| 16th | Late | Late fee assessed (4-5%). |
| 20th – 29th | Very Late | Frequent calls from bank collections. |
| 30th | Delinquent | Credit bureau notified. Score drops. |
| 45th | Notice sent | Demand letter issued. Counseling offered. |
| 60th | Severe Delinquency | Possible foreclosure initiation notice. |
The “Simple Interest” Mortgage Exception
A rare breed of loan exists called the “simple interest mortgage.” These do not use the standard grace period logic. Interest accrues daily based strictly on when they receive the money. If you pay on the 10th, you pay 10 days more interest than if you paid on the 1st. You must check your promissory note. If you have this type of loan, are all mortgage payments due on the first? Technically no, but paying late costs you real money immediately, even without a fee.
How To Verify Your Specific Terms
You should not guess. Pull out your “Promissory Note” from your closing documents. This is different from the Deed of Trust. The Note contains the specific financial agreement.
Look for a paragraph labeled “Payments.” It will state the place of payment, the amount, and the date. It will also define the “Late Charge.” This document overrides anything you read online. If it says payment is due on the 5th, then it is due on the 5th. Private loans between family members or hard money lenders often use these custom dates.
Final Thoughts On Payment Timing
Managing cash flow requires precision. While the banking system builds its infrastructure around the first of the month, you retain control within the 15-day window. Use the grace period if your pay cycle demands it. Set up bi-weekly payments if you want to crush the principal balance faster.
The question “are all mortgage payments due on the first?” represents a common anxiety about rigid banking rules. The reality offers more breathing room than most people realize. Check your statement, know your grace period limit, and set your automation to a safe date. Your mortgage should serve your financial goals, not dictate your calendar stress.
If you find yourself consistently paying after the 15th, you need to contact your lender for hardship options or a formal modification. Refer to HUD’s foreclosure avoidance guidance for steps to take if you fall behind. Staying ahead of the 30-day mark protects your financial future.