In Canada, an Interest Adjustment Date (IAD) is used to align your first regular mortgage payment with your preferred schedule—such as the 1st of the month. If your mortgage closes before that date, your lender will calculate the interest for the days between your closing date and the IAD, and you’ll make a one-time interest-only payment on the IAD. This ensures your regular payments start on your chosen date. You’re not paying extra overall—just the interest owed for that short period before full payments begin.

Here is a sample scenario with regard to an Interest Adjustment Date.

Mortgage amount: $400,000

Interest rate: 5.50%

Closing date: June 20

First regular payment date: August 1

Interest Adjustment Date (IAD): July 1

Your mortgage closes on June 20, but since you want your regular payments to start on the 1st of each month, your lender sets your IAD as July 1. This means you’ll make a one-time interest-only payment on July 1 to cover the interest from June 20 to June 30 (11 days).

Interest Calculation Example:

Interest = (Mortgage amount × Interest rate ÷ 365) × number of days

= ($400,000 × 0.055 ÷ 365) × 11

= $665.75 (one-time IAD payment due on July 1)

Your first full mortgage payment will then begin on August 1, and continue on the 1st of each month going forward.

Mortgage Sisters West are licensed mortgage brokers who serve all of Alberta, with a focus on our local Edmonton, Sherwood Park, St. Albert, Fort Saskatchewan, Spruce Grove, Stony Plain, Beaumont, Leduc and surrounding areas!

We are mortgage brokers franchised with our National Brokerage Mortgage Architects and can broker your mortgage in other provinces as well. We would love to work with you!