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Mortgage Loan Comparison Calculator

How do two mortgage offers compare?

Enter two mortgage offers and compare their estimated costs over the time you expect to keep the loan.

One Click Answers · Mortgage Loan Comparison
oneclickanswers.com/mortgage-loan-comparison · Printed
About this tool & how to use it

What it does

Compares two or more mortgage offers over the time you expect to keep the loan, including points and fees, with the monthly payment and the total cost of each.

How to use it

  1. Enter each loan's home price, down payment, interest rate, term, points and lender fees. Use the real rate each lender quoted.
  2. Choose how long you expect to keep the mortgage. Many people sell or refinance well before 30 years.
  3. Read the sentence at the top, then the payment, upfront cost, balance and break-even for each loan. Taxes, insurance and HOA are optional and are shown apart from the lender comparison.

Enter the home price, interest rate and term for every loan to compare them.

    Assumptions

    • Fixed-rate loans with level monthly payments made at the end of each month, with the rate divided by 12.
    • Points, lender fees and other loan costs are paid in cash at closing and are not rolled into the loan.
    • You keep the loan for the holding period entered and make no extra payments.
    • Escrow, rate changes, prepayment penalties and tax effects are not modeled.

    Printed from oneclickanswers.com. Results are estimates based on what was entered; see the assumptions above.

    How we calculated this

    Each loan's monthly principal and interest comes from the standard fixed-rate formula. A point is 1% of the loan amount, paid at closing. The tool never guesses what a point buys: you enter each loan's actual quoted rate.

    Upfront financing cost = points + lender fees + other loan costs, paid in cash at closing (not added to the loan). Financing cost over your holding period = upfront financing cost + the interest paid in those months. Principal you pay down is not a cost, so it is shown separately as a balance reduction.

    The break-even compares both loans month by month: for each month it adds the upfront cost to the interest paid so far, and finds the first month where the loan with the higher upfront cost is no longer more expensive. This is more accurate than dividing the upfront difference by the payment difference, because the interest saved each month changes as the balance falls. If that never happens, the page says so.

    Property taxes, homeowners insurance, mortgage insurance and HOA are household costs, not lender costs. They are shown if you enter them, but they never change which loan has the lower financing cost.

    Formulas and details
    • r = rate / 100 / 12; n = number of payments; P = loan amount = home price - down payment.
    • Monthly principal and interest M = P x r x (1 + r)^n / ((1 + r)^n - 1). When the rate is 0%, M = P / n.
    • Balance after k payments B(k) = P x (1 + r)^k - M x ((1 + r)^k - 1) / r. Interest paid through k = k x M - (P - B(k)).
    • Points cost = P x points / 100. Cumulative financing cost at month m = upfront cost + interest paid through m.

    Assumptions

    • Fixed-rate loans with level monthly payments made at the end of each month, with the rate divided by 12.
    • Points, lender fees and other loan costs are paid in cash at closing and are not rolled into the loan.
    • You keep the loan for the holding period entered and make no extra payments.
    • Escrow, rate changes, prepayment penalties and tax effects are not modeled.

    Example

    Input: $400,000 home, 20% down, 30 years, $4,000 in fees on both. Loan A: 6.0% with 1 point. Loan B: 6.5% with no points. Kept for 5 years.

    Result: Loan A pays $1,918.56 a month and Loan B $2,022.62 ($104.06 less). Loan A costs $7,200 up front and Loan B $4,000. Over 5 years, Loan A has an estimated financing cost of $100,087.64 and Loan B $104,912.19, which is $4,824.55 lower for Loan A. The extra upfront cost of Loan A is recovered after about 24 months.

    Questions

    Why does the holding period matter?

    Upfront costs such as points are paid once, while interest savings build up over time. A loan with higher upfront costs may look worse over three years and better over fifteen, so the answer depends on how long you keep it.

    What does the break-even month mean?

    It is the first month where the cumulative cost of the loan with higher upfront costs is no higher than the other loan's. Before that month, the other loan has cost less so far.

    Why are taxes and insurance kept separate?

    They do not depend on which lender you choose, so including them would not change the lender comparison. They are shown only so you can see an estimated total monthly housing payment.

    Does this include mortgage insurance or closing costs?

    Only if you enter them. Lender fees and other loan costs count toward the upfront cost. Mortgage insurance is a household cost shown separately.

    Last reviewed 2026-10-01.

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