To calculate overdue mortgage loan interest, determine the daily interest rate by dividing the annual interest rate by 365 (or 360, depending on the lender's policy). Multiply the outstanding principal balance by this daily rate and the number of days the payment is overdue. For example, a $300,000 loan at 4% annual interest incurs daily interest of ($300,000 × 0.04 ÷ 365) ≈ $3.29 per day. A 30-day overdue payment would accumulate $98.70 in interest. This calculation assumes simple interest, not compounded.

Lenders typically apply the same method to overdue amounts, but penalties or late fees may apply separately. Data from the Consumer Financial Protection Bureau (CFPB) shows that 3.5% of U.S. mortgages were 90+ days overdue in Q3 2022, with average delinquency-related interest costs exceeding $500 annually per borrower. The Federal Reserve reports that delinquent mortgages account for 12-15% of total mortgage servicing costs, driven by compounding interest and administrative expenses. These figures underscore the financial impact of delayed payments, as even minor delinquencies escalate costs over time. Lenders often enforce strict late payment policies to mitigate risks, particularly in variable-rate loans where interest rates may increase during repayment. The combination of daily interest accrual and potential penalties accelerates debt growth, making timely payments critical to avoid long-term financial strain.