Maddin

Anish,

Not sure if I understand your question correctly but here is my explanation.
Lets say you take a mortgage out on 1st June. Your first payment is due on 1st July. If you consider the date June 1st as T=0 then your mortgage payment is due @T=1. Therefore your calculation will be based on "end" mode and interest will be paid for the 1st month and not as you indicated like a cap lease. Hope this helps.