The Loan Estimate: What’s the interest rate on the mortgage?


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The loan’s interest rate is listed toward the top of Page 1, in the “Loan Terms” section. The same section lists the loan amount and the monthly principal and interest.

Loan Estimate form

If the mortgage offer is for a fixed-rate loan, the box to the right will say, “No,” to indicate that the interest rate cannot increase after closing. But if the box says, “Yes,” then the mortgage offer is for an adjustable-rate mortgage, or ARM.

Two other interest rate-related numbers appear on Page 3, in the “Comparisons” section:

Loan Estimate form
  • The annual percentage rate, or APR, is a calculation that results from adding closing costs to the total interest paid over the life of the loan.
  • The total interest percentage, or TIP, represents the total interest paid over the life of the loan as a percentage of the loan amount. For example, if you borrowed $100,000 and then paid $82,000 interest over the next 30 years, the TIP would be 82%.

Another vital piece of information can be found at the top of Page 1: the loan term. The loan term is the number of years it will take to pay off the mortgage in equal monthly installments. The most common loan term is 30 years. The 15- and 20-year loan terms are popular, too.

For more information about fixed-rate mortgages, read the basics of fixed-rate mortgages.

For more information about ARMs, read the basics of adjustable-rate mortgages.

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Loan Estimate Guide