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🏦 Mortgage Rate Comparison Calculator
Compare two loan offers side by side: monthly payment, points vs no points, break-even timeline. Make smarter rate shopping decisions.
🏠 Lender A
Offer 11 point = 1% of loan amount, reduces rate by 0.25% per point
🏡 Lender B
Offer 21 point = 1% of loan amount, reduces rate by 0.25% per point
⚡ Smart Presets:
Lender A Monthly Payment
$0.00
Points cost: $0
Total interest: $0
Lender B Monthly Payment
$0.00
Points cost: $0
Total interest: $0
📉 Monthly Payment Difference:
$0.00
-
⏱️ Break-even on buying points (if applicable):
—
ⓘ
Months to recover points/fees via lower payment.
| Month | Lender A Payment | Lender A Principal | Lender A Interest | Lender B Payment | Lender B Principal | Lender B Interest |
|---|
🏷️ Total Cost (Principal+Interest+Points+Fees):
$0
🏷️ Total Cost (Principal+Interest+Points+Fees):
$0
* Monthly payment = Principal & Interest only. Points cost = loan amount × (points/100). Rate reduction: 0.25% per point (adjustable).
🏡 Smart Home Finance Tools
Tap any calculator below — real-time results, no spreadsheets needed ⚡
🏦 How to Use This Mortgage Rate Comparison Calculator
This tool helps you compare two loan offers side‑by‑side, especially when one includes discount points and the other does not.
📋 Step‑by‑Step Instructions
- Enter the loan amount for each lender (e.g., $300,000).
- Enter the base interest rate (the rate with zero points) for each offer.
- Select the loan term (15, 20, or 30 years) for each column – terms can be different.
- If a lender offers discount points, enter the number of points. The calculator automatically reduces the rate by 0.25% per point and displays the final rate.
- Add any origination fees (closing costs, underwriting fees, etc.).
- Click Compare Offers to see monthly payments, payment difference, break‑even period, and total cost over the full loan term.
- Toggle the amortization table to see the first 12 months of principal and interest for each loan.
✅ Why This Calculator Matters
When shopping for a mortgage, you often face a trade‑off: pay points upfront for a lower rate, or take a higher rate with no points. A typical mortgage calculator only handles one loan at a time. This tool shows you, in real numbers, whether buying points saves money – and how long you must stay in the home to benefit. It empowers you to make data‑driven decisions and avoid costly mistakes.
🧮 The Math Behind It (With Examples)
Monthly Payment Formula (Principal & Interest):
For a $300,000 loan at 6.5% for 30 years:
Monthly rate = 6.5% ÷ 12 = 0.0054167
Number of payments = 30 × 12 = 360
Payment = $300,000 × [0.0054167 × (1.0054167)^360] / [(1.0054167)^360 – 1] = $1,896.20
Number of payments = 30 × 12 = 360
Payment = $300,000 × [0.0054167 × (1.0054167)^360] / [(1.0054167)^360 – 1] = $1,896.20
Points Cost: 1 point = 1% of loan amount. On $300,000, 1 point costs $3,000.
Break‑even Calculation (Points vs. No Points):
If paying points lowers your monthly payment by $97, and points cost $3,000:
Break‑even months = $3,000 ÷ $97 ≈ 31 months (2.6 years).
If you sell or refinance before 31 months, points cost you money. If you stay longer, you save.
❓ Frequently Asked Questions
Q: Does the calculator include property taxes or insurance?
A: No – it focuses on principal & interest, plus points and fees, so you see the pure impact of rate differences. Add taxes/insurance separately if needed.
Q: Can I compare loans with different terms (15‑year vs. 30‑year)?
A: Yes. Each column has its own term selector. The calculator will show accurate payments for each term, allowing you to compare apples‑to‑oranges fairly.
Q: How accurate is the rate reduction from points?
A: The calculator assumes a standard 0.25% rate drop per point. Actual reductions vary by lender (typically 0.20% to 0.35%). You can manually adjust the final rate if needed.
Q: Is this calculator free?
A: Yes – fully free, no sign‑up required. Share it with anyone comparing mortgage offers.
Q: What if I have different loan amounts for Lender A and Lender B?
A: The calculator works correctly. It compares each offer independently – monthly payments, total costs, and break-even are all calculated based on each loan's unique amount, rate, points, and fees.
Q: What is a good break‑even period for buying points?
A: Most experts recommend buying points only if you plan to stay in the home for at least 3‑5 years. If break‑even is under 36 months, points are usually worthwhile.
💡 Pro Tip: Always compare the APR (Annual Percentage Rate) across lenders – it includes points and fees, giving you a true cost comparison. Use this calculator alongside APR quotes for best results.
* All calculations are estimates based on standard mortgage formulas. Consult a licensed mortgage professional for official loan terms and personalized advice.
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