Loan Comparison Calculator

Choosing between mortgage offers isn't as simple as picking the lowest interest rate. The true cost of a loan depends on the rate, term, discount points, origination fees, and other closing costs — all working together.

• Interest rate vs. points trade-off — A lower rate often means paying more upfront in discount points. Each point costs 1% of the loan amount and typically reduces the rate by about 0.25%. Whether paying points is worth it depends on how long you keep the loan.
• Term length matters — A 15-year mortgage has higher monthly payments but dramatically lower total interest than a 30-year. On a $350,000 loan at 6.75%, you'd pay about $467,000 in interest over 30 years versus about $200,000 over 15 years — a difference of $267,000.
• Don't ignore closing costs — A loan with a lower rate but $5,000 more in fees may not actually save you money, especially if you sell or refinance within a few years.
• Use the break-even point — If you're deciding between paying points for a lower rate or keeping upfront costs low, the break-even month tells you how long you need to keep the loan for the points to pay off.

When you receive a Loan Estimate from a lender, pay close attention to these numbers — they're all inputs in this calculator:

• Loan amount — the principal you're borrowing, which is the home price minus your down payment.
• Interest rate — the annual rate the lender charges. Make sure you're comparing the same type (fixed vs. adjustable) across offers.
• Discount points — listed in Section A of your Loan Estimate under "Origination Charges." Points are optional — you can often choose between paying them or accepting a higher rate.
• Origination fee — what the lender charges for processing the loan, separate from points.
• Other closing costs — appraisal, title insurance, escrow, and recording fees. These vary by lender and location.

This is the most common loan comparison people make. Here's what you should know:

• Monthly payment — A 15-year mortgage payment is roughly 40-50% higher than a 30-year on the same amount. Make sure you can comfortably afford the higher payment without stretching your budget.
• Interest rate — 15-year mortgages typically come with rates 0.5-0.75% lower than 30-year loans, because the lender's risk is lower.
• Total interest — You'll pay roughly half the interest on a 15-year mortgage — both because the rate is lower and the payoff period is shorter. The savings are often six figures.
• Opportunity cost — The lower payment on a 30-year frees up cash each month. If you invest that difference at a return higher than your mortgage rate, you could come out ahead financially — though this requires discipline and market returns aren't guaranteed.