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Why is my loan payoff amount higher than my balance?
The statement shows principal; the payoff adds daily interest and fees. The Regulation Z text, per-diem arithmetic at 6.50%, and the pre-2015 FHA rule.
A loan payoff amount is higher than the balance because a monthly statement shows the principal balance, while a payoff statement adds interest accrued daily since the last paid installment, plus any late fees, escrow shortage, recording or release fee and any prepayment penalty the note carries.
Evergreen arithmetic, not news: on an illustrative $200,000 at 6.50%, interest is $13,000 a year, or $35.62 a day on a 365-day year: $356.16 after 10 days, $712.33 after 20, $1,068.49 after 30.
Why is my loan payoff amount higher than my balance?
They are required to show different numbers. 12 CFR 1026.41(d)(7) makes a mortgage statement show the outstanding principal balance and interest rate; 12 CFR 1026.36(c)(3) defines a payoff statement as the total required to pay in full as of a specified date, so accrued daily interest is in one and not the other.
What is included in my mortgage payoff amount?
Principal, interest to the good-through date, unpaid late fees, escrow shortage or advances, recording or release fees, and a prepayment penalty if the note has one; an FHA loan closed before 21 January 2015 may owe interest to the next first-of-month under 24 CFR 203.558(b)(2).
What happens if my payoff amount is short?
The loan stays open. On a loan secured by a principal dwelling, 12 CFR 1026.36(c)(1) requires a periodic payment to be credited as of receipt and allows a partial payment to sit in suspense; interest keeps accruing, so request a fresh quote.
Sources: 12 CFR 1026.41, 12 CFR 1026.36, 24 CFR 203.558, read by this desk on 15 September 2026. Not advice: request the written payoff statement the seven-business-day rule entitles you to, and your early-settlement clause says whether a penalty applies.