Servicing Guide

Published October 14, 2020

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How should the interest portion of a monthly payment be calculated?

The servicer must calculate the mortgage interest portion of the monthly payment as follows, in accordance with C-1.1-01, Servicer Responsibilities for Processing Mortgage Loan Payments. 

If the mortgage loan is... Then the interest portion must be determined by calculating...

a fixed-rate first lien mortgage loan

30 days’ interest on the UPB as of the LPI date and using the current accrual rate.

a fixed-rate first lien biweekly mortgage loan

14 days’ interest on the UPB as of the LPI date and using the current interest accrual rate.

a fixed-rate second lien mortgage loan

each monthly payment using the payment-to-payment calculation method, when this is required by the security instrument. Otherwise, interest must be determined as outlined above.

an ARM loan

each monthly payment based on its applicable effective interest accrual date.

Note: Multiple interest accrual rates may apply. 

For more information please see Servicing Guide F-1-09, Processing Mortgage Loan Payments and Payoffs. 

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If you have additional questions, Fannie Mae customers can visit Ask Poli to get information from other Fannie Mae published sources.

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