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When advertising mortgage loan APRs, do we need to include odd days’ interest (meaning the interest accrued in the first days after a loan closing before the first full month)? Is there a recommended number of odd days to include, or is this a subjective choice for a lender? – IBA Compliance Connection

IBA Compliance Connection

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When advertising mortgage loan APRs, do we need to include odd days’ interest (meaning the interest accrued in the first days after a loan closing before the first full month)? Is there a recommended number of odd days to include, or is this a subjective choice for a lender?

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We are not aware of any requirement to include odd days’ interest in the calculation of a sample APR for advertising purposes.

For resources related to our guidance, please see:

  • Regulation Z, 12 CFR 1026.24(a) (“If an advertisement for credit states specific credit terms, it shall state only those terms that actually are or will be arranged or offered by the creditor.”)