Why Closing at the End of the Month Can Save You Money

Let’s talk about a low-key money move that too many homebuyers miss: closing at the end of the month. It sounds like a scheduling thing… but it’s actually a savings hack.

Here’s why:

💸 What’s This “Prepaid Interest” Stuff?

When you close on your home, your lender doesn’t waste a second—interest on your loan starts building that day. But here’s the kicker: you pay that interest up front for every day left in the month.

Let’s say you close on April 5th. That means you’re paying interest from April 5th all the way to April 30th—25 days of interest due at closing. Ouch.

Now flip it.

If you close on April 28th? You only pay 2 or 3 days of interest. That’s real money back in your pocket at closing.

📅 Why This Matters at the Closing Table

Prepaid interest is part of your closing costs. And the fewer days you owe, the lower those costs.

So while your realtor’s worried about final walk-throughs and contract addendums, you need to be watching the calendar like it owes you money—because it kinda does.

More days left in the month = more interest to prepay = higher closing costs.
Fewer days = less money out of pocket.

🏁 When Should You Close?

If your schedule allows, aim for the last week of the month. You’ll still pay that interest—no escaping Uncle Sam’s cousin, the lender—but you’ll owe way less of it up front.

And for those wondering: No, this doesn’t change your first mortgage payment. That’s still due the first of the second month after you close.

So, closing May 28th? First payment due July 1st.

👀 Bonus Tip: Rate Locks and Timing

If your interest rate is locked in, don’t push your closing back too far just to save on prepaid interest. It’s a balance between timing and cost. If pushing closing risks your rate expiring and you have to re-lock at a higher rate… that could cancel out your savings.

Ready to Play Chess, Not Checkers?

Buying a home is full of big decisions—and little ones that matter just as much. I’m Kory Small, your go-to mortgage broker based in Katy, TX, serving the surrounding areas and the entire state of Texas. I help smart folks like you buy homes without getting blindsided at the closing table.

If you’re trying to time it right and keep more cash in your pocket, let’s talk strategy.
👉 Set up a time to chat with me right here.

And if you’re still figuring out how much house you can afford, I’ve got you:
🔍 Use my affordability calculator here.

Let’s get you home—the smart way.