Should You Close at the Beginning or End of the Month?

Your closing date can slightly change how much you pay at closing and how long you have before your first mortgage payment. It’s not a huge deal, but it’s a good homebuying fun fact to know.

When you purchase a home, you generally pay interest from the day you close through the end of that month. This is called prepaid interest, and it’s usually included in the money you bring to closing.

If you close toward the end of the month, there are fewer days left in the month, so you’ll generally pay less prepaid interest at closing. The tradeoff is that your first mortgage payment will be coming up sooner.

If you close toward the beginning of the month, there are more days of prepaid interest to account for, so you’ll generally bring more money to closing. However, you’ll also have more time before your first mortgage payment is due—sometimes close to two months.

For example, someone closing near the beginning of September will typically make their first mortgage payment on November 1. Someone closing near the end of September will typically also make their first payment on November 1, but they’ll have much less prepaid interest due at closing.

So does closing at the end of the month actually save you money? Not really. You’re paying less interest at closing because you owned the home for fewer days that month. The money doesn’t disappear—you’re mostly changing the timing of when your housing costs are paid.

That’s why your closing date usually shouldn’t be a major deciding factor. Whether you close at the beginning or end of the month, the bigger difference is cash flow and timing, not some major savings.

It’s simply a useful detail to understand so you know why your prepaid interest and first payment date look the way they do.