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Finance Calc Kit
Mortgages

Mortgage Comparison Calculator

Compare two mortgage loans side-by-side. Calculate differences in monthly payments, total interest paid, and total loan costs to find the best deal.

Mortgage loan A

A
$
%
years
$
$

Mortgage loan B

B
$
%
years
$
$

Cheaper loan choice

Loan B costs less overall

Saves $232,212.02 in total lifetime cost

Side-by-side comparison

MetricLoan ALoan BDifference
Monthly payment (P&I)$1,896.20$2,491.23$595.03
Actual monthly payment$1,896.20$2,491.23$595.03
Payoff term30.0 yrs15.0 yrs15.0 yrs
Total interest$382,633.47$148,421.45$234,212.02
One-time fees$3,000.00$5,000.00$2,000.00
Total lifetime cost$685,633.47$453,421.45$232,212.02

Loan A summary

$685,633.47

6.5% · 30 years · 360 months to payoff

Loan B summary

$453,421.45

5.8% · 15 years · 180 months to payoff

How mortgage comparison works

Each loan is amortized month by month, including optional extra principal payments and upfront closing costs.

  1. Calculate the standard monthly payment

    M=P×r(1+r)n(1+r)n−1M = P \times \frac{r(1+r)^n}{(1+r)^n - 1}

    Loan A requires $1,896.20 per month at 6.5% over 30 years. Loan B requires $2,491.23 per month at 5.8% over 15 years.

  2. Simulate payoff with extra payments

    Principalm=M+Extra−Interestm\text{Principal}_m = M + \text{Extra} - \text{Interest}_m

    Extra monthly payments shorten the payoff timeline. Loan A pays off in 360 months and Loan B in 180 months with the current extra payment settings.

  3. Compare total lifetime cost

    Total Cost=P+∑Interest+Fees\text{Total Cost} = P + \sum \text{Interest} + \text{Fees}

    Including interest and closing costs, Loan A totals $685,633.47 and Loan B totals $453,421.45. Loan B saves $232,212.02 overall.

Report tool

How to compare two mortgage offers

Shopping for a mortgage means weighing more than the interest rate. A lower rate on a longer term can still cost more in total interest than a slightly higher rate on a shorter term. Closing costs, discount points, and extra principal payments also change the true lifetime cost of each loan.

This calculator puts loan A and loan B side by side so you can compare monthly payments, payoff timelines, total interest, and all-in cost including fees. For a broader comparison across up to three generic loan options, use the loan comparison calculator. To see how much interest each loan generates, try the mortgage interest calculator. To estimate your full housing payment with taxes and insurance, use the mortgage calculator with taxes and insurance. Canadian buyers should model semi-annual compounding and CMHC rules with the Canadian mortgage calculator.

What to compare beyond the rate

  • Monthly payment (P&I): The required principal and interest payment at the quoted rate and term.
  • Payoff term with extra payments: How quickly each loan retires if you add a fixed extra amount every month.
  • Total interest: Cumulative interest paid from the first payment through payoff.
  • Closing costs and fees: Origination charges, points, and third-party fees added to lifetime cost.

Monthly payment formula

Both loans start from the standard amortization payment:

The tool then simulates month-by-month payoff. Any extra monthly payment is applied to principal after interest is deducted, which can shorten the loan and reduce total interest.

Worked example

Compare a $300,000 loan at 6.5% over 30 years with $3,000 in closing costs against the same amount at 5.75% over 15 years with $5,000 in fees. Loan A has a lower monthly payment of about $1,896 but pays about $382,633 in interest over 30 years for a total cost near $685,633. Loan B requires about $2,491 per month but pays only about $148,421 in interest over 15 years, for a total cost near $453,421. Despite the higher monthly payment, loan B saves about $232,212 in lifetime cost under these assumptions.

Choosing the better loan

The cheapest loan on paper is not always the best fit for your budget. A shorter term saves interest but demands a higher monthly payment. Compare total lifetime cost when you plan to keep the loan for many years, and weigh monthly payment when cash flow is tight. Always request a Loan Estimate from each lender so fees are transparent.

Frequently asked questions

Should I always pick the loan with the lowest interest rate?
Not necessarily. A lower rate on a longer term can still cost more total interest than a slightly higher rate on a shorter term. Compare total lifetime cost, not just the rate.
How do extra monthly payments affect the comparison?
Extra payments reduce the payoff timeline and total interest for that loan. The tool simulates each loan month by month with your extra payment included, so you can see how prepayments change the outcome.
What fees should I include?
Include lender origination fees, discount points, and any closing costs you pay out of pocket. Do not double-count costs rolled into the loan balance unless you increase the loan amount to reflect them.
Does this compare APR?
No. This tool compares amortized monthly payments, simulated payoff terms, total interest, and upfront fees. APR incorporates some fees into an annualized rate, which lenders disclose separately on the Loan Estimate.
Can I compare an ARM to a fixed-rate loan?
This calculator assumes a fixed rate for the full term. For adjustable-rate structures, model the fixed period first or use a dedicated ARM calculator when available.
Are my inputs stored on a server?
No. All calculations run in your browser. Changing inputs updates the page URL so you can bookmark or share a scenario.

Resources and references

The formulas and methods in this calculator were checked against these independent sources.