Mortgage Comparison Calculator

Compare two mortgage options side-by-side to determine which loan saves you more money in monthly payments, total interest, and overall cost.

Loan A

$
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% of loan amount

$

Loan B

$
%
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% of loan amount

$

Ready to Compare

Enter the details for both loan options, then click Compare Loans to see which is the better deal.

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Pro Tip

Always compare the 5-year cost alongside the total cost. Most homeowners sell or refinance within 7-10 years, so the short-term cost is often more relevant than the 30-year total.

Try the Refinance Calculator →

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How to Compare Mortgage Options

Choosing between mortgage options requires looking beyond just the interest rate. The total cost of a loan includes not only interest but also upfront costs like points and closing fees. A loan with a lower rate but higher upfront costs may not always be the better deal, especially if you plan to move or refinance within a few years.

Mortgage points (discount points) allow you to buy down your interest rate by paying an upfront fee. Each point typically costs 1% of the loan amount and reduces the rate by about 0.25%. Whether this makes financial sense depends on how long you keep the loan.

This calculator provides multiple comparison metrics: monthly payment, total interest over the full term, total cost including upfront fees, and the critical 5-year cost comparison. The 5-year cost is particularly important because most homeowners do not keep their mortgage for the full term.

When comparing different loan terms (e.g., 15-year vs 30-year), consider your budget flexibility and investment alternatives. A 30-year loan with lower payments invested wisely could potentially outperform the interest savings of a 15-year loan, depending on market returns.

Comparison Formulas

Total Cost Formula

Total Cost = (M × n) - P + Points Cost + Closing Costs

Where:

M = Monthly payment

n = Total number of payments

P = Principal (loan amount)

Points Cost = Loan amount x points percentage

Example

Comparing $400,000 at 7% vs 6.5% with 1.5 points:

  • • Loan A: 7%, no points - Payment: $2,661/mo, Total cost: $567,960 + $8,000 = $575,960
  • • Loan B: 6.5%, 1.5 pts - Payment: $2,528/mo, Points: $6,000, Total cost: $510,137 + $14,000 = $524,137
  • • Loan B saves $51,823 total but costs $6,000 more upfront
  • • Breakeven: $6,000 / $133/mo savings = ~45 months

Frequently Asked Questions

Should I pay points for a lower rate?
Paying points makes sense if you plan to keep the loan long enough to recoup the upfront cost through lower monthly payments. Divide the points cost by the monthly savings to find your breakeven point in months. If you will keep the loan longer than that, paying points saves money.
How do I compare a 15-year vs 30-year mortgage?
A 15-year mortgage has higher monthly payments but substantially less total interest. Use this calculator to see the exact difference. Consider whether the higher monthly payment fits your budget and whether you could invest the difference elsewhere.
What costs should I include in the comparison?
Include the loan amount, interest rate, term, mortgage points, and all closing costs (origination fees, appraisal, title, etc.). Points and closing costs are factored into the total cost comparison and the 5-year cost analysis.
What is the 5-year cost and why does it matter?
The 5-year cost shows total interest paid plus upfront costs over the first 5 years. This is crucial because the average homeowner stays in a home for about 7-10 years, so the short-term cost comparison may be more relevant than the full-term comparison.
Is the lower rate always the better deal?
Not necessarily. A lower rate loan with high points and closing costs may cost more over 5 years than a higher rate loan with no points. The total cost depends on how long you keep the loan, the upfront costs, and the rate difference.