Comparing offers by rate alone can mislead: a lower rate with more points or fees may cost more if you sell or refinance early. Comparing total cost over the years you expect to keep the loan is the fairest test.
How to use the Mortgage Comparison Calculator
- Loan amount
- Years you expect to keep the loan
- Mortgage A rate
- Mortgage A term
- Mortgage A points
- Mortgage A fees
- Mortgage B rate
- Mortgage B term
- Mortgage B points
- Mortgage B fees
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the loan amount, the years you expect to keep the loan, and the rate, term, points and fees of each offer.
Inputs explained
| Field | What to enter |
|---|---|
| Loan amount | Amount in your currency |
| Years you expect to keep the loan | A number |
| Mortgage A rate | In % |
| Mortgage A term | In years |
| Mortgage A points | In % |
| Mortgage A fees | Amount in your currency |
| Mortgage B rate | In % |
| Mortgage B term | In years |
| Mortgage B points | In % |
| Mortgage B fees | Amount in your currency |
What each result means
- Mortgage A monthly payment = pmt([Mortgage A rate]÷1200, [Mortgage A term]×12, [Loan amount])
- Mortgage B monthly payment = pmt([Mortgage B rate]÷1200, [Mortgage B term]×12, [Loan amount])
- Mortgage A cost over the years you keep it = [Mortgage A monthly payment]×min([Years you expect to keep the loan], [Mortgage A term])×12 + [Loan amount]×[Mortgage A points]÷100 + [Mortgage A fees] – ([Loan amount] – max(bal([Loan amount], [Mortgage A rate]÷1200, [Mortgage A term]×12, min([Years you expect to keep the loan], [Mortgage A term])×12), 0))
- Mortgage B cost over the years you keep it = [Mortgage B monthly payment]×min([Years you expect to keep the loan], [Mortgage B term])×12 + [Loan amount]×[Mortgage B points]÷100 + [Mortgage B fees] – ([Loan amount] – max(bal([Loan amount], [Mortgage B rate]÷1200, [Mortgage B term]×12, min([Years you expect to keep the loan], [Mortgage B term])×12), 0))
- Mortgage A APR = rate([Mortgage A term]×12, 0 – [Mortgage A monthly payment], [Loan amount] – [Loan amount]×[Mortgage A points]÷100 – [Mortgage A fees])×1200
- Mortgage B APR = rate([Mortgage B term]×12, 0 – [Mortgage B monthly payment], [Loan amount] – [Loan amount]×[Mortgage B points]÷100 – [Mortgage B fees])×1200
- Difference = abs([Mortgage A cost over the years you keep it] – [Mortgage B cost over the years you keep it])
Formula
Payment = pmt(rate ÷ 12, months, loan)
Total cost = payments × months + points + fees
APR = rate equating (loan − points − fees) with the payments
Worked example
Inputs: Loan amount: $350,000; Years you expect to keep the loan: 7; Mortgage A – rate: 6.5 %; Mortgage A – term: 30 years; Mortgage A – points: 0 %; Mortgage A – fees: $3,000; Mortgage B – rate: 6 %; Mortgage B – term: 30 years; Mortgage B – points: 1.5 %; Mortgage B – fees: $3,500.
Results: Mortgage A – monthly payment = $2,212.24; Mortgage B – monthly payment = $2,098.43; Mortgage A – cost over the years you keep it = $155,284.86; Mortgage B – cost over the years you keep it = $148,755.71; Mortgage A – APR = 6.583 %; Mortgage B – APR = 6.238 %; Cheaper over your time frame = Mortgage B; Difference = $6,529.15.
Frequently asked questions
How do I compare mortgage offers?
Compare the APR and total cost over the years you expect to keep the loan.
Are points worth it?
Only if you keep the loan past the break-even point.
Should I compare 15- and 30-year loans?
Yes. 15-year loans have higher payments but far less total interest.
Sources
Guides on this topic
- How to Calculate a Mortgage Payment (Formula + Example): The mortgage payment formula explained step by step, with a worked example, what PITI adds on top, and how rate, term, down payment and extra payments change what you pay.