Mortgage Comparison Calculator - Compare Loan Options
Free mortgage comparison calculator for side-by-side loan analysis including payments, interest, and break-even calculations
Mortgage Comparison Calculator
Loan 1 Results
Loan 2 Results
Comparison Summary
What is a Mortgage Comparison Calculator?
A mortgage comparison calculator enables side-by-side evaluation of two mortgage options with different terms, rates, and fees. It calculates monthly payments, total interest, total costs, and break-even points to help borrowers make informed decisions between competing loan offers or different mortgage structures.
This calculator helps with:
- Lender comparison - Evaluate competing offers from multiple lenders objectively
- Term evaluation - Compare 15-year versus 30-year mortgages with actual numbers
- Points analysis - Determine if paying points for lower rates saves money long-term
- Rate shopping validation - Quantify savings from rate differences to justify lender changes
- Break-even calculation - Find when higher upfront fees are recouped through lower payments
For basic mortgage payment calculations without comparison features, use our home mortgage calculator for single loan analysis.
To evaluate acceleration strategies like extra payments or biweekly schedules, try our mortgage acceleration calculator for payoff optimization.
When considering complete housing costs including taxes and insurance, explore our PITI calculator for total monthly payment analysis.
For refinancing decisions comparing current mortgage to new loan options, use our refinance calculator for break-even and savings analysis.
How Mortgage Comparison Works
The calculator computes complete costs for both mortgages, then calculates differences and break-even points to facilitate decision-making.
The formulas:
Total Interest = (Monthly Payment × Months) - Principal
Total Cost = Total Paid + Upfront Fees
Break-Even = Fee Difference / Monthly Savings
Comparison metrics:
- Monthly Payment - Monthly cash flow requirement for each option
- Total Interest - Lifetime interest costs over full loan term
- Total Cost - Complete cost including principal, interest, and fees
- Break-Even Point - Months until fee differences are recouped by payment savings
The calculator identifies which loan costs less monthly, which saves more interest long-term, and when higher upfront costs are justified by lower payments or rates.
Key Concepts Explained
Shorter terms (15 years) have higher monthly payments but dramatically lower total interest and faster equity building. Longer terms (30 years) offer payment flexibility and lower monthly costs but pay significantly more interest over time.
Even 0.25-0.5% rate differences create substantial savings. On a $300,000 loan, 0.5% equals approximately $90 monthly and $32,000 over 30 years. Rate shopping is critical for maximizing long-term savings.
Paying points reduces rates but increases upfront costs. Break-even typically occurs in 5-7 years. Choose points if you'll keep the mortgage longer than break-even; choose no-point loans if refinancing or selling sooner.
Lowest monthly payment doesn't always mean best value. Consider total cost over your expected ownership period. A slightly higher payment with much lower interest may save tens of thousands long-term despite monthly cash flow impact.
How to Use This Calculator
- Enter Loan 1 details - Input loan amount, interest rate, term, and any upfront fees
- Enter Loan 2 details - Input competing loan's amount, rate, term, and fees
- Click Compare - See side-by-side monthly payments, interest, and total costs
- Review break-even point - Understand when higher fees are recouped by savings
- Check recommendation - See which loan offers better value based on comparison
- Adjust scenarios - Try different terms, rates, or fee structures to optimize choice
Benefits of Using This Calculator
- Objective comparison - Eliminate guesswork with side-by-side numerical analysis of loan options
- Long-term perspective - See total costs over loan lifetime, not just monthly payments
- Break-even clarity - Understand exactly when paying points or fees makes financial sense
- Negotiation power - Use comparisons to negotiate better terms or justify lender switching
- Confidence in decisions - Make informed choices backed by complete cost analysis
- Time value assessment - Evaluate whether higher upfront costs justify long-term savings
Factors That Affect Your Results
- Expected ownership duration - Break-even analysis assumes you keep the loan; selling early changes value proposition
- Refinancing likelihood - If you'll refinance within 5-7 years, upfront fees may not be recouped
- Interest rate differences - Small rate variations create large lifetime savings differences worth significant effort
- Fee structures - Include all costs (points, origination, closing) for accurate total cost comparison
- Cash flow needs - Monthly payment affordability may trump long-term savings for budget-constrained buyers
Frequently Asked Questions
Should I choose a 15-year or 30-year mortgage?
15-year mortgages have higher monthly payments but significantly lower total interest (often saving $100,000+). 30-year mortgages offer lower payments and more flexibility. Choose 15-year if you can afford higher payments and want faster equity building, or 30-year for lower payments and investment flexibility.
How do mortgage points affect total cost?
Paying points (1 point = 1% of loan amount) reduces your interest rate by typically 0.25% per point. Points make sense if you plan to keep the mortgage long enough to recoup the upfront cost through lower monthly payments, typically 5-7 years.
What is the break-even point for paying points?
Divide the cost of points by your monthly payment savings to find break-even months. For example, if points cost $3,000 and save $50 monthly, you break even in 60 months (5 years). If you'll keep the mortgage longer, points save money long-term.
Should I pay origination fees for a lower rate?
It depends on how long you'll keep the loan. Calculate break-even like with points. If you plan to refinance or sell within a few years, lower upfront fees with slightly higher rates may be better. For long-term mortgages, paying fees for lower rates usually saves money.
How much difference does 0.5% in interest rate make?
On a $300,000 30-year mortgage, 0.5% rate difference equals about $90 in monthly payment and roughly $32,000 in total interest over the loan lifetime. Even small rate differences create substantial long-term savings, making rate shopping critically important.
Is it better to have a shorter term or make extra payments?
Shorter terms guarantee lower interest through higher required payments, while extra payments on longer terms offer flexibility to adjust or stop payments if needed. Shorter terms also typically have lower interest rates, but 30-year mortgages with consistent extra payments provide payment flexibility.