Mortgage Comparison
Calculator.

1. Side-by-side is your anchor view.

The default view lines up both loans with a "Difference" column on the right. Start there. It's the fastest way to spot where the two offers diverge — rate, points, closing, monthly payment, total interest. If Loan B has a smaller monthly payment but much higher closing costs, the difference column tells you exactly how much extra you're paying upfront for that savings.

2. Green means winner.

After you click View comparison, the calculator scores every loan by its total cost — monthly payment × term + fees. The loan with the lowest total cost gets a green border and a ★ Best Deal badge. Below the badge you'll see a one-line explanation of exactly why it won — shorter term, lower rate, or both. If two loans are within $100 of each other on total cost, pick the one with the lower monthly payment since the lifetime difference is negligible.

3. Total cost of loan is the number that matters most.

Each loan column shows three numbers: the monthly payment, the total interest paid over the life of the loan, and the total cost of the loan (interest + points + closing). It's the total cost of loan that decides the winner — a loan can have a lower monthly payment but cost you more overall because it runs longer. The calculator automatically highlights the loan with the lowest total cost as the ★ Best Deal.

4. Points reduce your rate but cost cash upfront.

Discount points are prepaid interest — 1 point equals 1% of the loan amount paid at closing in exchange for a lower rate (usually around 0.25% per point). If Loan B costs you $4,000 more upfront but saves $100/mo, you break even at month 40 (~3.3 years). If you plan to stay in the home past that point, paying points wins. If you're moving or refinancing before then, the extra upfront cash was wasted.

5. Closing costs are cash at day one.

Unlike interest (which you pay over time), closing costs and discount points hit your bank account the moment you close. The calculator treats them as upfront cash so the break-even math is honest. A lender offering a 0.25% lower rate for "only $4,000 in points" is really asking you to front $4,000 today in exchange for monthly savings over time — and whether it's worth it depends entirely on how long you plan to keep the loan.

Not all rates are created equal.

Two lenders can advertise the same interest rate and offer you two completely different deals. That's why it's important to compare mortgage lenders carefully. One might charge $8,000 in closing costs. The other might charge $12,000 plus a point. The "rate" is the headline — but the full cost of the loan is what actually comes out of your pocket over the next 30 years.

A loan comparison calculator forces you to put all of it on the same page: rate, term, points, closing costs, monthly payment, total interest. Only then can you honestly answer "which loan is cheaper?"

The true cost includes points and closing.

Discount points let you "buy down" your interest rate. Each point costs 1% of your loan amount and typically drops your rate by about 0.25%. So on a $400,000 loan, 1 point costs $4,000 and might save you $60/mo — but you have to live in the home 5+ years to break even.

Closing costs are different — they include lender origination fees, title insurance, escrow fees, and recording fees. These vary wildly between lenders. Two loans with the same rate and same points can have a $4,000 difference in closing costs. That's real cash out of your pocket.

The math that matters.

For each loan, the full cost is:

Total = (Monthly P&I × Term in months) + Points + Closing costs

Where Monthly P&I is the standard amortization formula: M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1]. P is the loan amount, r is the monthly rate, n is total months.

Apply that formula to both loans, add their upfront costs, and compare the totals. The smaller number is the cheaper loan over the full term. But if you won't hold the loan the full term — which most people don't — you need the break-even year too.

How the 4-step calculation works.

What are discount points?

A discount point is a prepaid fee you pay the lender at closing in exchange for a lower interest rate for the life of the loan. One point equals 1% of your loan amount and typically drops your rate by about 0.25%. The CFPB explains how discount points and lender credits work — and when each makes sense.

On a $400,000 loan, 1 point costs you $4,000 upfront. If that buys you a 0.25% rate drop — say from 5.27% down to 5.02% — your new monthly payment is about $62 lower. You save $62/mo forever, but you paid $4,000 for the privilege. Break-even comes at month 65 (~5.4 years). Stay longer than that and points are a win. Sell or refinance sooner and the points were wasted money.

Closing costs aren't interest — but they count.

Closing costs are the bundle of fees you pay to actually close the loan: lender origination, appraisal, title insurance, escrow setup, recording fees, credit report pulls. They typically run 2% to 5% of the loan amount — on a $400,000 loan, that's $8,000 to $20,000. The CFPB outlines every standard closing fee and what each one covers.

Closing costs are not interest, so they don't show up in the APR in an obvious way. But they're real cash that comes out of your pocket on closing day, so an honest comparison has to include them. Two loans with identical rates but a $4,000 closing cost difference are not the same deal.

Pro tip: negotiate them. Lender fees are often flexible — especially origination fees. Ask for an itemized breakdown of closing costs from every lender you're comparing, not just the headline rate.

The break-even year: when paying more upfront pays off.

This is the single most important concept in comparing loans. The break-even year is the month (or year) at which the cash you paid upfront — in points and extra closing costs — is finally recouped by your lower monthly payments.

The math is simple:

Break-even months = Extra upfront cash ÷ Monthly savings

If Loan B costs $5,000 more upfront but saves you $127/mo, your break-even is 5,000 ÷ 127 = 39 months (about 3.3 years). Plan to stay in the home longer than that? Loan B wins. Plan to sell or refinance sooner? Loan A wins — save the cash and accept the slightly higher rate.

This is also the lens you should use when your lender pitches a refinance. Total closing costs of the refi, divided by the monthly savings, gives you the break-even. If it's longer than how long you realistically plan to stay, refinancing is a waste.