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Mortgage Comparison Calculator

Enter the loan amount plus the rate and term for each offer to compare monthly payments and total interest cost.

How it is calculated

One loan amount is priced under two offers, A and B, each with its own annual rate (%) and term (years). For each offer: r = rate / 100 / 12, n = years × 12, payment = L × r × (1 + r)n / ((1 + r)n − 1) (or L / n at 0%). Total paid is payment × n. The tool then reports the monthly payment of A and B, the monthly difference (A − B) and the total-cost difference (A − B). A negative value means offer A is cheaper on that measure. Because both offers borrow the same amount, the total-cost difference equals the interest difference. Taxes, insurance, points and closing fees are not included.

Worked example

Loan 300000. Offer A: 6.5% for 30 years. Offer B: 6% for 15 years. Offer A has r = 0.005417 and n = 360, giving a payment of $1,896.20. Offer B has r = 0.005 and n = 180, giving $2,531.57. Monthly difference A − B = -$635.37, so A is cheaper each month. Over the whole loan A costs 682,633 and B costs 455,683, so A costs $226,950.78 more in total.

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Common mistakes

  • Choosing the offer with the lower monthly payment and stopping there. The longer term lowers the payment but usually raises the total cost, as the total-cost difference shows.
  • Reading a negative difference as a mistake. The differences are A minus B, so a negative number means A is lower than B.
  • Entering the term in months. Both terms are in years, so 15 years is 15, not 180.
  • Expecting different loan amounts per offer. This tool compares both offers on one shared amount; if one lender needs a larger loan, run the figures separately.
  • Treating the result as the full housing cost. Property tax, insurance and any upfront points or fees are not in these numbers.

Sources

About this calculator

A mortgage comparison lays two loan offers side by side — the same loan amount with each offer's own interest rate and term — and computes the monthly principal-and-interest payment for both using the standard amortization formula, then shows how much the monthly payment and the total cost over the full life of the loan differ between them. This turns two headline rates into concrete dollar figures that are actually comparable.

Homebuyers use this comparison when shopping quotes from multiple lenders, or when weighing a lower rate with a shorter term against a higher rate with a longer term, since a lower monthly payment does not always mean a lower total cost — a 30-year loan at a slightly lower rate can still cost tens of thousands more in interest than a 20-year loan at a slightly higher one. Mortgage brokers and loan officers run the same side-by-side math to explain trade-offs like paying points to buy down a rate.

Keep the loan amount fixed, enter the rate and term of each offer, and you see both monthly payments, the gap between them and how much more one costs over its full life, so the cheaper offer is obvious at a glance.

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Comments (1)

  • Editorial team

    To see what the term alone does, give both offers the same rate. At 6.5 for both, 30 years against 15 on 300000 shows a monthly payment 717.12 lower on the long loan, yet the long loan costs 212,235.49 more over its life. Then change one rate at a time to see how much each lever moves the result. Which trade-off is your lender pushing, a lower rate or a shorter term?

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