Loan Basics

Total Interest Percentage (TIP)

The Total Interest Percentage, or TIP, on your Loan Estimate shows the total interest you'll pay over the full loan term as a percentage of your loan amount. A TIP of 119% means that, if you keep the loan the whole term, you'll pay about $1.19 in interest for every dollar you borrowed. It's a plain way to see long-term cost.

TIP lives on page 3 of the Loan Estimate, in the Comparisons box. It’s easy to mix up with your interest rate or APR, but it answers a different question: across the entire loan, how much interest will you pay in total compared to what you borrowed?

The number often looks startling, because thirty years of interest adds up. It’s a useful gut check, especially when you’re weighing a shorter term or extra principal payments, both of which pull that percentage down. It assumes you keep the loan the whole term, which many people don’t.

Related terms

APR

APR, or annual percentage rate, is the yearly cost of your loan including certain fees, not just the interest rate. Because it folds in some closing costs, the APR is usually a bit higher than your rate. It's meant to help you compare loan offers on a more apples-to-apples basis.

Amortization

Amortization is how your loan gets paid off over time through regular payments. Early on, more of each payment goes to interest and less to principal. As the years pass, that flips, and more goes toward the balance. By the end of the term, the loan is fully paid off.

Loan Term

Your loan term is how long you have to pay back the mortgage, written in years. Thirty years and fifteen years are the most common. A longer term means a lower monthly payment but more interest paid over time. A shorter term costs more each month but builds equity faster and saves on total interest.

Last updated: June 13, 2026

This definition is educational and isn't an offer to lend or financial advice. Rates, programs, and guidelines may change without notice. All loans are subject to credit and property approval.

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