Compare two loan offers
A lower rate usually costs more upfront. See which offer costs less over the time you expect to keep the loan.
Use comparable fixed-rate offers. Costs are treated as paid upfront, and mortgage insurance stays constant. Taxes, home insurance, and HOA dues are the same for both and left out. This is not an APR calculation.
Offer B costs less over 5 years by
Interest, upfront costs, and mortgage insurance over 5 years.
| Offer A | Offer B | |
|---|---|---|
| Monthly payment | $2,023 | $1,970 |
| Interest paid | $100,912 | $96,897 |
| Balance remaining | $299,555 | $298,679 |
A lower cost here does not establish which loan suits you. Confirm fees, insurance, and terms with your loan officer.
Educational estimate only. Not a rate quote, loan offer, or approval. Rates shown are assumptions you can edit. Your numbers stay in your browser.
How this calculator works
For each offer, the calculator adds the interest paid over your time horizon, the upfront loan costs, and any monthly mortgage insurance. The offer with the lower total costs less over that period.
The remaining balance is shown too, because a lower rate also pays the loan down slightly faster.
Common questions
Should I pay points for a lower rate?
Points make sense when you keep the loan long enough for the monthly savings to exceed the upfront cost. Change the number of years above to find where the two offers cross.
Is this the same as comparing APR?
No. APR spreads certain costs over the full loan term. This comparison uses the number of years you actually expect to keep the loan, which is often shorter.
What should match between the two offers?
Compare the same loan amount, loan type, term, and rate-lock period. Otherwise the difference in cost may come from the loan itself rather than the lender.
A loan officer can walk through them with you. It costs nothing to ask.