Total of All Payments
Definition and meaning of Total of All Payments in real estate.
The total of all payments is the absolute sum of money a borrower will have paid to the lender after making all scheduled mortgage payments through the end of the loan term. This total is a federal disclosure required by the Truth in Lending Act to show the true cost of borrowing money.
In more detail
This figure is calculated by adding the total principal amount borrowed to the total interest that will accumulate over the life of the loan. It also includes any prepaid interest and financed mortgage insurance premiums, though it excludes ongoing property taxes, homeowners insurance, and late fees.
Since mortgages are typically long-term loans spanning fifteen or thirty years, the total of all payments is often more than double the original loan amount due to compounding interest. Reviewing this disclosure on the Closing Disclosure helps buyers understand the long-term cost of their mortgage and highlights the financial benefits of securing a lower interest rate or making extra principal payments.
Key facts
| Category | Mortgages & Financing |
|---|---|
| Governing law | Disclosed under the federal Truth in Lending Act (TILA) |
| Key document | Found on the Closing Disclosure and Loan Estimate |
| Main components | Total principal borrowed plus the total interest paid over the entire term |
A borrower who takes out a $200,000 mortgage at a fixed interest rate for thirty years will have a total of all payments of approximately $400,000 once all scheduled payments are completed.
Frequently asked questions
Does the total of all payments include my property taxes?
No, this disclosure only includes payments made directly toward the loan principal, interest, and certain financed fees. It does not include ongoing property taxes, homeowners insurance, or utility bills.
How can I reduce the total of all payments on my mortgage?
You can reduce this amount by securing a lower interest rate, choosing a shorter loan term such as fifteen years instead of thirty, or making extra payments directly to your principal balance to pay off the loan early.