What Does Prorated Mean?

Prorated Lease

Real estate transactions are often prorated. If you sign a lease halfway through the month you owe only the portion of the rent for the time that you actually inhabit the apartment.

Find a home mid-month and pay a prorated amount.

Determine Dates

If your June rent is $600 a month, and you move in on the 15th day of the month, you only owe rent from the June 15 to June 30.

A calendar helps determine prorated amount.

Do The Math

Divide $600 by the number of days in the month, which is 30. Your answer is 20, which means you pay $20 a day to live in your apartment. You owe a prorated amount of rent for the month of June that is equal to $20 times the number of days you will live there. That total is $300, or the prorated rent amount.

Pay the prorated amount.

Other Transactions

Auto loans, credit cards and taxes during real estate closings are also prorated. Amounts can be based on daily rates, monthly rates or even yearly rates.

Read your contract to understand your prorated financial responsibilities.