The Real Estate Encyclopedia & Blog

Interest

by | Feb 5, 2026

In real estate finance, Interest is the charge paid for the use of borrowed money, known as the principal. It represents the lender’s compensation for lending funds and assuming the risk of repayment.

Interest is usually expressed as a percentage rate and may be calculated over time based on the loan terms. In real estate loans, interest is a major component of mortgage payments and a key factor in the overall cost of financing.