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Cumulative Interest, Definition

Posted by in Mortgage Definitions / Glossary on Feb 24th, 2011

Cumulative Interest:

The word cumulative means to increase something by successive addition. For example, the effects of smoking cigarettes are cumulative. For every year you smoke, tar accumulates on your lungs. So cumulative interest can be used to describe all of the interest you’ve paid up until this point (e.g. “The cumulative interest on my loan, as of today, is $20,000.”) or it can mean the total amount of interest that you pay over the lifetime of a loan. (e.g. “The loan term is 30 years, and at the end of that term, you would have paid $100,000 in total cumulative interest.”)



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