Mortgage Comparison Calculator

Compare two mortgage scenarios side by side to see which option saves you more money. Evaluate different loan amounts, interest rates, and terms to make a confident borrowing decision.

The mortgage comparison calculator runs the standard amortization formula on two separate loan scenarios and presents the results in a clear side-by-side format so you can evaluate the tradeoffs between different mortgage options. For each scenario, the calculator takes your loan amount, interest rate, and loan term, then computes the monthly principal and interest payment using the amortization formula. This formula divides the monthly interest rate multiplied by the present value factor across the total number of payments to produce a fixed monthly amount that fully repays the loan by the end of the term. Once it has the monthly payment for each option, the calculator multiplies by the number of payments to determine the total amount paid over the life of each loan. Subtracting the original loan amount from the total paid gives you the total interest cost for each scenario. The difference between the two total costs tells you exactly how much one option saves over the other. The calculator also shows how payments are allocated between principal and interest over time for each loan. A 15-year loan, for example, devotes a much larger share of each payment to principal from the start compared to a 30-year loan, which means you build equity faster even though the monthly payment is higher. This tool is especially useful for comparing a 30-year loan against a 15-year loan, evaluating two rate offers from different lenders, seeing the impact of buying points to lower your rate, or deciding between a larger loan with a lower rate and a smaller loan with a higher rate. By looking at both the monthly cash flow impact and the total cost over time, you can choose the option that best fits your financial goals.

Do not focus solely on the monthly payment when comparing mortgages. A 30-year loan will always have a lower monthly payment than a 15-year loan, but you pay far more in total interest. On a $280,000 loan at 6.75 percent, the 30-year option costs about $374,000 in interest versus roughly $142,000 on a 15-year term. The monthly difference is significant, but so is the $232,000 in total savings.

When comparing rate offers from different lenders, make sure you are comparing the annual percentage rate (APR) rather than just the note rate. The APR includes origination fees, points, and other lender charges, giving you a more accurate picture of the true cost of each loan. A loan with a lower note rate but higher fees could actually be more expensive than one with a slightly higher rate and lower fees.

Use this calculator to evaluate whether paying mortgage points makes financial sense. Each point typically costs 1 percent of the loan amount and reduces your rate by about 0.25 percent. Compare the upfront cost of points against the monthly savings to find your break-even point. If you plan to stay in the home longer than the break-even period, buying points saves money over time.

Consider your investment alternatives when choosing between a lower or higher monthly payment. If you can earn a higher return by investing the difference between a 15-year and 30-year payment, the 30-year loan might build more wealth overall despite costing more in interest. This decision depends on your risk tolerance, investment discipline, and expected returns.

A 15-year mortgage saves significantly on total interest and builds equity faster, but the higher monthly payments reduce your cash flow flexibility. A 30-year mortgage offers lower payments and more budget breathing room. The best choice depends on your income stability, other financial goals, and whether you would invest the monthly savings from a 30-year loan.

One mortgage point costs 1 percent of the loan amount and typically reduces your interest rate by about 0.25 percent. On a $280,000 loan, one point costs $2,800 and might save around $45 per month. It would take about 62 months to break even. Points are worthwhile if you keep the loan longer than the break-even period.

The answer depends on how long you plan to keep the mortgage. If you expect to sell or refinance within a few years, lower upfront fees save more because you will not hold the loan long enough for a lower rate to offset higher costs. For long-term homeowners, a lower rate typically wins because the monthly savings compound over many years.

Yes. On larger loans, even small rate differences produce bigger monthly and total cost savings. A 0.25 percent rate difference on a $500,000 loan saves roughly twice as much per month as on a $250,000 loan. Higher loan amounts also make points more cost-effective because the monthly savings relative to the point cost improves with loan size.

This calculator provides estimates for informational purposes only. Results are based on the inputs you provide and standard financial formulas. Actual amounts may vary based on your specific situation, location, lender requirements, and market conditions. This is not financial, tax, or legal advice. Always consult with qualified professionals before making real estate or financial decisions.

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Monthly Savings

$584.71

Loan A Monthly Payment$1,816.07
Loan B Monthly Payment$2,400.78
Loan A Total Interest$373,786.88
Loan B Total Interest$152,141.12
Loan A Total Cost$653,786.88
Loan B Total Cost$432,141.12

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