Mortgage Comparison Calculator

How to compare two mortgage offers

Compare the monthly payment, the upfront cost and the total cost over the years you expect to keep the loan. The offer with the lower total cost for that period is cheaper. If one offer costs more upfront, the break-even month is when its upfront cost plus interest paid so far falls to the other offer’s.

Take each offer’s rate, points and lender fees from its Loan Estimate. Our guide on how to read a Loan Estimate shows where to find them.

• Monthly payment = loan × r × (1 + r)^n ÷ ((1 + r)^n − 1), where r is the annual rate ÷ 12 and n is years × 12
• Upfront cost = loan × points ÷ 100 + lender fees
• Interest paid = monthly payment × months held − (loan − remaining balance after those months)
• Total cost = upfront cost + interest paid
• Break-even month = the first month in which the higher-upfront offer's upfront cost plus interest paid so far is no more than the other offer's
• Payback month (monthly savings only) = upfront difference ÷ monthly difference, rounded up

Worked example: a $340,000 loan over 30 years, kept for 10 years. Offer A is 7.03% with no points, so the payment is $2,268.88. Offer B is 6.78% with one point, so the payment is $2,212.02 and the point costs $3,400 upfront. B saves $56.86 a month. Counting the interest B saves, its upfront cost plus interest paid falls below A’s in month 48, which is the break-even month. On monthly savings alone, $3,400 ÷ $56.86 = 59.79, so the payback month is 60. Over 10 years A pays $224,234 in interest and B pays $215,677. With the point included, A costs $224,234 in total and B costs $219,077, so B costs $5,157 less.

Which offer is cheaper depends on how long you keep the loan

An offer with a higher upfront cost wins only if you keep the loan past the break-even month. If you sell or refinance sooner, the offer with less upfront cost is cheaper. Nobody knows their hold time in advance, so try a few values in the years field, such as 3, 7 and 10.

If you might refinance later, the Refinance Break-Even Calculator shows whether a new loan would pay back its own costs.

Paying points for a lower rate

One point costs 1% of the loan and buys a lower rate, but how much lower varies by lender and by day, so use real quotes. Enter a lender’s no-points quote as Offer A and its one-point quote as Offer B. The break-even month shows how long you need to keep the loan for the point to pay off.

To test one point against a base rate, use the Mortgage Points Calculator.

15-year vs 30-year, and extra payments

A 15-year loan has a higher monthly payment than a 30-year loan but pays much less interest, because the balance falls faster and the loan ends sooner. Extra payments work the same way by cutting principal early. The second calculator above runs both with your numbers.

For a full payment schedule, use the Extra Payment Calculator.