Multi-Loan Mortgage Comparison Calculator
Compare two mortgage offers head-to-head by total cost over your planned stay, including closing costs. Perfect for buyers weighing a lower rate with higher fees against a higher rate with lower upfront costs.
About this calculator
The true cost of a mortgage over a given horizon is: Total Cost = (Monthly Payment × Number of Payments) + Closing Costs, where the monthly payment follows the amortization formula M = P × r(1+r)ⁿ / ((1+r)ⁿ − 1). Here n equals the years you plan to stay multiplied by 12, not the full loan term — because moving before payoff is the norm. The calculator computes this total for both loans and returns the difference: Cost Difference = Total Cost (Loan 1) − Total Cost (Loan 2). A positive result means Loan 2 is cheaper over your stay; negative means Loan 1 wins. This break-even framework is critical because a lower rate only saves money if you stay long enough to recoup the higher closing costs often attached to it.
How to use
Compare a $350,000 loan at 6.25% with $4,000 closing costs versus 6.75% with $1,000 closing costs. You plan to stay 7 years. Loan 1 monthly payment ≈ $2,155; total over 84 months = $181,020 + $4,000 = $185,020. Loan 2 monthly payment ≈ $2,270; total over 84 months = $190,680 + $1,000 = $191,680. Difference = $185,020 − $191,680 = −$6,660. Loan 1 saves about $6,660 over 7 years, so paying the higher closing costs is worth it if you stay that long.
Frequently asked questions
How do I calculate the break-even point between two mortgage offers with different rates and closing costs?
The break-even point is reached when cumulative monthly savings from the lower-rate loan equal the extra closing costs paid upfront. Divide the additional closing costs by the monthly payment difference to get the number of months needed. For example, if Loan A costs $2,000 more in closing costs but saves $50 per month, you break even in 40 months. If you stay longer than that, the lower-rate loan wins.
Should I pay points to lower my mortgage interest rate?
Paying discount points (each point equals 1% of the loan amount) reduces your interest rate, typically by 0.125–0.25% per point. Whether it makes sense depends entirely on how long you keep the loan. Calculate how many months of reduced payments it takes to recover the upfront cost. If you plan to sell or refinance before that break-even month, buying points wastes money; if you stay longer, you come out ahead.
What closing costs should I include when comparing mortgage offers?
Closing costs include lender origination fees, discount points, appraisal, title insurance, attorney fees, and prepaid items like homeowners insurance and property tax escrow. The lender-controlled costs (origination, points) are most negotiable and vary most between offers. Always use the Loan Estimate form, which lenders must provide within three business days of application, to make an apples-to-apples comparison.