Mortgage Loan Calculator And Comparison Tool

Mortgage Payment Formulas:

\[ M1 = P \times \frac{r1 \times (1 + r1)^n}{(1 + r1)^n - 1} \] \[ M2 = P \times \frac{r2 \times (1 + r2)^n}{(1 + r2)^n - 1} \]

Loan Principal (P):

USD

First Interest Rate (Annual):

Second Interest Rate (Annual):

Loan Term:

years

First Monthly Payment (M1):

Second Monthly Payment (M2):

Monthly Difference:

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is a Mortgage Loan Comparison Calculator?

Definition: This calculator compares two mortgage options by calculating their monthly payments and showing the difference between them.

Purpose: It helps homebuyers and refinancers evaluate different loan options to make informed financial decisions.

2. How Does the Calculator Work?

The calculator uses the standard mortgage payment formula for both rates:

\[ M = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Where:

$ M $ — Monthly payment (USD)
$ P $ — Loan principal (USD)
$ r $ — Monthly interest rate (annual rate ÷ 12, in decimal)
$ n $ — Number of payments (loan term in years × 12)

Explanation: The calculator computes payments for both interest rates and shows which option is more expensive and by how much.

3. Importance of Mortgage Comparison

Details: Even small rate differences can significantly impact your monthly payment and total interest paid over the loan term.

4. Using the Calculator

Tips: Enter the loan amount, two interest rates to compare, and loan term. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How much difference does 0.25% make on a mortgage?
A: On a $300,000 30-year loan, 0.25% difference equals about $44/month or $15,840 over the loan term.

Q2: Should I always choose the lower rate?
A: Consider other factors like closing costs, points, and loan features. A slightly higher rate might be better if it has lower fees.

Q3: Does this include taxes and insurance?
A: No, this calculates principal and interest only. Your actual payment may include escrow for taxes and insurance.

Q4: How does loan term affect payments?
A: Shorter terms mean higher monthly payments but less total interest. Compare different terms using this tool.

Q5: Can I compare more than two rates?
A: Currently this tool compares two rates. For multiple comparisons, run calculations separately and compare results.