Total Interest Percentage (TIP)
Direct definition
Total Interest Percentage is the total amount of interest a borrower will pay over the life of the loan, expressed as a percentage of the loan amount.
Written by the Vabasso Mortgage Editorial Team · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Plain-English explanation
TIP is disclosed on the Closing Disclosure and shows the cumulative interest cost relative to the loan amount, assuming all payments are made as scheduled for the full term. It helps borrowers see the long-term cost of borrowing beyond the monthly payment.
Why it matters
Comparing TIP across loan offers can highlight how term length and interest rate affect total cost over time, not just the monthly payment.
Where you may see it
- Closing Disclosure
A real-world example
Educational and illustrative only
A common misunderstanding
TIP is not the same as APR — it reflects total interest paid rather than an annualized cost including certain fees.
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- Author
- Vabasso Mortgage Editorial Team
- Reviewed by
- Vabasso Mortgage Licensed Advisory Team
- Last reviewed
- July 30, 2026