Mortgage Comparison Calculator
Comparing mortgage offers requires looking beyond the interest rate. A lower rate with higher fees can cost more than a slightly higher rate with lower fees — depending on how long you keep the loan. This calculator shows the true cost of each offer at your planned holding period.
Enter your loan amount, then details for two loan offers to see monthly payments, total costs, APR, and which loan wins at your holding period.
| Metric | Loan A | Loan B | Difference |
|---|
How to Actually Compare Mortgage Offers
The interest rate is the starting point, not the end point. Two lenders quoting 6.5% may have very different origination fees, discount points, and lender credits. The only apples-to-apples comparison is total cost over your planned holding period — not just the monthly payment or the rate alone.
Rate vs. Fees: The Core Tradeoff
Lenders constantly trade off between rate and fees. A lower rate typically comes with higher upfront fees (origination charges, discount points). A higher rate may come with a lender credit that reduces or eliminates closing costs. The right choice depends on how long you plan to keep the loan. If you refinance or sell in 3 years, the low-rate/high-fee option rarely makes sense. If you keep the loan for 15 years, a lower rate with $5,000 in fees could save $30,000 in total interest.
| Scenario | Rate | Fees | Monthly | Better if hold… |
|---|---|---|---|---|
| Low rate, high fees | 6.375% | $8,000 | $1,996 | 7+ years |
| Mid rate, mid fees | 6.625% | $4,000 | $2,050 | 4–7 years |
| High rate, no fees | 6.875% | $0 | $2,101 | Under 3 years |
APR: The Standardized Comparison
APR (Annual Percentage Rate) converts both the rate and fees into a single standardized percentage, allowing direct comparison across different fee structures. The APR is always ≥ the interest rate. A loan with 6.5% rate and $8,000 in fees on a $320,000 loan has an APR of about 6.76%. A loan with 6.875% rate and $0 fees has an APR of 6.875%. On a 30-year hold, the first loan is slightly better. On a 5-year hold, the second loan is better because you never recoup the upfront fee savings.
For the full closing cost breakdown of each offer, use the Closing Costs Calculator. For the decision of whether to buy points specifically, the Mortgage Points Calculator shows the exact breakeven for any points scenario. For more context on comparing offers, read our guide on how to compare mortgage offers.
Frequently Asked Questions
What is APR vs. interest rate on a mortgage?
The interest rate is the cost to borrow principal, expressed annually. APR is broader — it includes the rate plus fees (origination, points, mortgage insurance) expressed as an annual percentage. For comparing offers with different fee structures, APR is more useful. A lower interest rate with high origination fees can have a higher APR than a slightly higher rate with no fees.
When is a lower interest rate with points worth it?
When the monthly savings recoup the upfront fee cost before you sell or refinance. Breakeven = Upfront Cost ÷ Monthly Savings. Paying $4,000 for a rate that saves $80/month breaks even at 50 months (4.2 years). If you'll keep the loan 5+ years, buying points wins. Under 4 years, the higher rate with lower fees is typically better.
Should I choose a 15-year or 30-year mortgage?
15-year offers a lower rate and dramatically less total interest but ~40% higher monthly payment. On a $320K loan, 15yr at 6.2% costs ~$2,730/mo vs. $2,085/mo for 30yr at 6.8%. Total interest: ~$171K vs. ~$431K. The 15-year saves $260K but requires $7,740/yr more. If you can afford it and plan to stay long-term, the 15-year often wins on total cost.
How do I compare Loan Estimates from different lenders?
Focus on Section A (Origination Charges) — this is the most negotiable and where lenders differ most. Compare APR, not just rate. Look at total closing costs on page 2. Never compare just the monthly payment. Use a calculator with your expected holding period to see total cost of each loan — including upfront fees amortized over how long you'll actually keep it.
What is a no-closing-cost mortgage?
Closing costs rolled into a higher interest rate (lender-paid) or added to the loan balance. You need less cash at closing, but the monthly payment is higher. The math: if the extra monthly cost from the higher rate exceeds the closing costs you saved within your holding period, you'd have been better off paying closing costs upfront. Typically makes sense if you plan to sell or refinance within 3–5 years.
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