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What is the Total Interest Percentage (TIP) on a Loan Estimate?
Updated November 2026 · Every dollar figure is an illustrative example, not a quoteThe Total Interest Percentage, TIP, is all the interest you would pay over the full term of the loan as a percentage of the amount you borrowed: on a $380,000, 30-year loan at 6.625% it is about 130%, meaning about $496,000 of interest on top of the $380,000. It is in the Comparisons box on page 3, it is not a rate, and the number shocks everyone the first time.
Where it is on the form
Page 3, the Comparisons box, as Total Interest Percentage (TIP), with a printed definition: the total amount of interest you will pay over the loan term as a percentage of your loan amount. It sits beside the APR and under the In 5 Years figure.
The TIP depends on the rate and the term and almost nothing else. At 6.625% over 30 years, interest is about 1.3 times the loan; at 5.75% over 15 years it is about half the loan. Points and fees are not in it. On an adjustable-rate loan it is computed as if the rate followed the current index, which it will not.
Why it is so high: a 30-year mortgage is 360 payments, most of which in the early years are interest. On the $380,000 example the first payment is about $2,098 of interest and $335 of principal, and it takes about 20 years before more of each payment goes to principal than to interest. The TIP is the total of all that interest, assuming you keep the loan the full term and never pay extra.
Why it is not as bad as it looks: almost nobody pays it. The figure assumes 30 years with no refinance, no sale and no extra payments. The useful thing it does is make the term vivid: the same $380,000 at 5.75% over 15 years has a TIP of about 49%, roughly $188,000 of interest instead of $496,000, in exchange for a payment about $720 a month higher. That is the trade the two numbers put in front of you.
Can you shop for it?
Not a service, and only a rough comparison: between two loans of the same term it tracks the rate, so a lower rate always has a lower TIP. It says nothing about fees, which is why it sits beside the APR rather than replacing it.
Can it change between the Loan Estimate and closing?
Not a fee, so no tolerance. It changes only when the rate or the term changes, which is to say when the loan does.
A worked example (illustrative)
A $380,000 loan at 6.625% for 30 years, against the same loan at 5.75% for 15 years. The figures are illustrative.
| Loan | Monthly P&I | Total interest | TIP |
|---|---|---|---|
| 30-year at 6.625% | $2,433 | about $496,000 | about 130% |
| 15-year at 5.75% | about $3,156 | about $188,000 | about 49% |
The 15-year loan costs about $720 more a month and saves about $308,000 of interest over its life. Whether that trade is right depends on what else the $720 could do and how long you will stay. The TIP does not answer that; it just makes the sizes clear.
Questions to ask the lender
- What would the TIP be on a 15-year or 20-year term at your rates?
- On an ARM: what index and margin did you assume for the TIP?
- How much would paying an extra $200 a month cut the total interest?
Red flags
- A TIP presented as the cost of the loan without the term beside it.
- An ARM's TIP compared directly with a fixed loan's as if both were certain.
- Nothing else: the TIP is a calculation and cannot be gamed by a lender.
Questions people ask
Why is my TIP over 100%?
Because over 30 years at a rate above about 5.3%, the interest adds up to more than the amount borrowed. It is normal at current rates. It assumes you keep the loan the full term with no extra payments, which almost nobody does.
Is TIP the same as APR?
No. The APR is a yearly rate that folds in fees; the TIP is a lifetime total of interest alone as a share of the loan. A loan can have a low APR and a high TIP simply because it is a 30-year loan.
How do I lower the TIP?
A lower rate or a shorter term. Paying extra toward principal also cuts the real interest you pay, though the TIP printed on the form will not change, since it assumes the scheduled payments.
Only have one quote? That's the problem.
Tell us the rate and the fees you were quoted. It is free, there is no credit pull, and nobody calls you. We check whether another lender beats it, fees included. Or start with the free Loan Estimate checker, which reads your rate, points and Section A and flags anything out of the ordinary.
Check my quoteEvery dollar figure on this page is illustrative. Fee ranges are general observations, not a survey or a quote, and are not a loan offer, approval, commitment to lend, or Loan Estimate. Your actual rates and fees depend on qualification with lenders, your state and county, and your closing date. The tolerance rules described are the federal TRID rules in general terms; the rule itself and your own Loan Estimate and Closing Disclosure decide how it applies to your loan. comparemyloan does not negotiate with lenders, lock rates, or take loan applications.