Interest on Mortgage

The interest expense portion of the mortgage payment (excluding the portion applied to principal and/or a reserve account). The interest may be accrued or prepaid. Accrued – The interest portion of the mortgage that is applied to the previous month; often referred to as interest in “arrears.” Prepaid – The interest portion of a mortgage payment that is applied to the current month, i.e. the interest is paid in advance; the June payment pays June interest.