Home Loan Comparison Calculator

Enter the details for two loan options to compare monthly payments, total interest, and total cost side by side. The calculator determines which loan is the better deal and shows a year-by-year balance paydown chart.

Created by Luis GonzalezLast updated: July 1, 2026

How to Use This Calculator

1
Enter Loan Option 1
Input the loan amount, rate, term, and estimated closing costs for the first offer.
2
Enter Loan Option 2
Input the same details for the second loan offer.
3
Add a Third Option (Optional)
Enter a third loan offer for a more comprehensive comparison.
4
Set Your Expected Ownership Period
Enter how long you plan to stay in the home for accurate cost comparisons.
5
Review the Comparison
See which loan costs less over your ownership period, including all fees and interest.

Example Calculation

Comparing two mortgage offers from different lenders.

Loan A Rate

6.25%

Loan A Closing Costs

$8,500

Loan B Rate

6.5%

Loan B Closing Costs

$3,200

Loan Amount

$300,000

Term

30 years

Ownership Period

7 years

Results

Loan A total cost over 7 years

$147,850. Loan B total cost over 7 years: $145,100. Loan B saves $2,750 despite the higher rate because of $5,300 lower closing costs. After 12+ years, Loan A becomes the better deal.

Tips

Use APR for Comparison

APR accounts for fees and gives a more accurate picture than the interest rate alone. But also check total costs over your specific time horizon.

Do Not Ignore Closing Costs

A lower rate with higher closing costs may not save money if you plan to move or refinance within a few years.

Ask About Rate Locks

Rates change daily. Ask each lender about rate lock periods and costs so you can compare offers at the same point in time.

Comparing Home Loan Options: Rates, Terms, and Total Costs

The Home Loan Comparison Calculator evaluates two mortgage options side by side, analyzing monthly payments, total interest, and overall cost. For two $350,000 loans — Loan A at 6.5% over 30 years ($2,212.24/mo) and Loan B at 5.9% over 15 years ($2,934.62/mo) — Loan B saves $268,174 in total cost despite the $722 higher monthly payment.

Understanding Mortgage Terms and Their Financial Impact

The choices you make about interest rates and loan duration have profound long-term consequences. A 30-year mortgage offers lower monthly payments but accumulates far more interest. The 15-year option demands higher monthly payments but can save hundreds of thousands in interest. On $350,000 at 6.5%, you pay $446,406 in interest over 30 years — more than the original loan amount. At 5.9% over 15 years, interest totals just $178,232.

The Amortization Formula for Loan Comparisons

Both loans use the standard amortization formula to calculate fixed monthly payments:

monthly payment = (P × r × (1 + r)^n) / ((1 + r)^n − 1)

Where P = principal, r = monthly rate (annual rate / 12), n = total payments (years × 12).

total interest = (monthly payment × n) − P
total cost = monthly payment × n

The calculator applies this formula to each loan and compares the results directly.

💡 For a detailed payment breakdown of a single loan, our Home Loan Amortization Calculator shows the month-by-month principal vs. interest split and full schedule.

Worked Example: Two $350,000 Mortgage Scenarios

Comparing two $350,000 home loan options:

Loan A: 6.5% rate, 30-year term
Loan B: 5.9% rate, 15-year term

Loan A Monthly Payment: r = 6.5%/12 = 0.005417, n = 360 → $2,212.24/mo
Loan A Total Interest: ($2,212.24 × 360) − $350,000 = $446,406
Loan A Total Cost: $796,406
Loan B Monthly Payment: r = 5.9%/12 = 0.004917, n = 180 → $2,934.62/mo
Loan B Total Interest: ($2,934.62 × 180) − $350,000 = $178,232
Loan B Total Cost: $528,232
Total Savings: $796,406 − $528,232 = $268,174
Monthly Payment Difference: $2,934.62 − $2,212.24 = $722.38

Loan B saves $268,174 in total cost while paying off 15 years sooner. The trade-off is a $722/mo higher payment.

💡 Considering an adjustable-rate mortgage? Our ARM Mortgage Calculator can help you model rate adjustments and compare against fixed-rate options.

Fixed-Rate vs. Alternative Mortgage Structures

This calculator compares fixed-rate, fully amortizing loans. Other structures exist: interest-only mortgages have lower initial payments but no principal reduction, and ARMs start with a lower rate that adjusts over time. When comparing, ensure you are evaluating similar loan types for an accurate assessment. A fixed-rate comparison eliminates rate-change uncertainty and provides a clear apples-to-apples analysis.

The Role of Loan-to-Value (LTV) in Mortgage Pricing

LTV ratio — your loan amount relative to the home's value — significantly affects the interest rate you receive. An 80% LTV (20% down payment) typically qualifies for the best rates, potentially 0.25-0.5% lower than a 95% LTV loan. Loans above 80% LTV also require Private Mortgage Insurance (PMI), adding $50-$200/month to costs. Factor LTV-driven rate differences into your loan comparison for a complete picture.

Frequently Asked Questions

What factors should I compare between home loans?

Compare interest rates, APR (which includes fees), loan terms, monthly payments, total interest paid, closing costs, and whether the rate is fixed or adjustable. Also consider lender reputation, customer service, and any special programs for first-time buyers.

Is a lower interest rate always the better deal?

Not necessarily. A loan with a lower rate but higher closing costs may cost more overall than a slightly higher rate with lower fees. Compare the APR, which factors in all costs, and calculate the break-even point to determine which loan saves more over your expected ownership period.

Should I compare 15-year vs. 30-year mortgages?

A 15-year mortgage has higher monthly payments but lower interest rates and far less total interest. A $350,000 loan at 6% costs about $754,000 total over 30 years versus $533,000 over 15 years. Choose based on your budget and long-term financial goals.