Mortgage Loan Comparison Calculator

Model two loan scenarios side-by-side — compare monthly payments, total interest over any horizon, and true cost including fees and points.

How to Compare Mortgage Loan Options

  • A lower interest rate doesn't always mean a better deal. Rolling closing costs into a slightly higher rate (lender credits) may cost less in the long run if you sell or refinance within a few years.
  • The 15-year vs. 30-year trade-off comes down to cash flow vs. total interest. A 15-year loan typically carries a lower rate and builds equity faster, but the higher payment reduces financial flexibility.
  • Total interest paid over the life of the loan is the true cost of borrowing. This number often reveals that a small rate difference — say 0.25% — adds up to thousands of dollars over 30 years.

Calculation details

Methodology

For each scenario, the calculator subtracts the down payment from the purchase price and applies the standard fixed-rate amortization formula to calculate monthly principal and interest. Entered monthly taxes, insurance, and HOA dues are added to show an estimated housing payment. Total interest equals scheduled P&I payments over the full term minus the original loan amount.

Assumptions and limitations

  • Each scenario uses a fixed rate and fully amortizing payment for the selected term.
  • The displayed total cost includes down payment, principal, and interest but excludes recurring taxes, insurance, and HOA dues.
  • PMI, points, lender fees, closing costs, prepaid items, APR, and sale or refinance timing are not included.
  • Taxes, insurance, and HOA inputs remain level rather than increasing over time.
  • Compare the calculator with official Loan Estimates before choosing a loan.

Worked example: 30-year versus 15-year loan

  • $500,000 purchase price and 20% down
  • $400,000 loan amount
  • Scenario A: 6.5% for 30 years
  • Scenario B: 6.0% for 15 years
  • $500 monthly tax and $150 monthly insurance

Scenario A produces about $2,528 monthly P&I and $510,178 total interest. Scenario B produces about $3,375 monthly P&I and $207,577 total interest.

The shorter term raises the required monthly payment by about $847 but reduces modeled lifetime interest by roughly $302,601 before fees and other housing costs.

Official sources

Frequently Asked Questions

Is a 15-year or 30-year mortgage better?

It depends on your priorities. A 15-year mortgage has a higher monthly payment but you'll pay roughly half the total interest and own your home outright in half the time. A 30-year offers a lower payment and more monthly cash flow flexibility — useful if you want to invest the difference. The right choice depends on your income stability, other financial goals, and how long you plan to stay in the home.

How much does 0.25% difference in interest rate actually matter?

On a $300,000 30-year mortgage, a 0.25% rate difference changes your monthly payment by about $44/month and total interest by roughly $16,000 over the life of the loan. Over a shorter horizon (e.g., 7 years before selling), the same 0.25% difference costs about $3,700. Small rate differences matter most on large loan amounts and long time horizons.

What should I compare when shopping for a mortgage?

Compare the APR (not just the interest rate) since APR includes lender fees. Also compare the total interest paid over the expected time you'll hold the loan, not just the life of the loan. Factor in closing costs — a lower rate with high points may lose to a slightly higher rate with no points if you sell within 5 years. Use this calculator to model your specific scenario.

Should I take lender credits to cover closing costs?

Lender credits (negative points) give you cash at closing in exchange for a higher interest rate. This makes sense if you plan to sell or refinance within 3–5 years and want to minimize upfront cash. If you plan to stay long-term, you'll pay more in interest than the credit saved you. The break-even period is usually 3–6 years.

How to use this estimate

This calculator is an educational planning tool. Results are based on the figures and assumptions entered by the reader, use standard mortgage mathematics, and are not a loan offer, approval, or substitute for a lender's Loan Estimate. Taxes, insurance, fees, mortgage insurance, and available rates vary by borrower, property, lender, and location.

Review the assumptions, compare more than one scenario, and confirm the final numbers with a licensed mortgage professional before making a financial commitment.