# Mortgage comparison: which wins?

Compares two mortgage offers on the same home: the monthly principal and interest, points, fees and interest over the years you keep the loan, the APR, and which one costs less.

- Page: https://www.acalculator.org/finance/mortgage-comparison-calculator
- JSON spec: https://www.acalculator.org/finance/mortgage-comparison-calculator.json
- Version: 2d8c3817239f

## Default answer

Example with the default inputs (Home price $400,000.00, Down payment $80,000.00, Mortgage A rate 6.5%, Mortgage A term (years) 30, Mortgage A points 0, Mortgage A lender fees $0.00, Mortgage B rate 6.125%, Mortgage B term (years) 30, Mortgage B points 1, Mortgage B lender fees $0.00): Mortgage B costs $24,975.02 less over 360 months: $408,142.36 for mortgage A against $383,167.34 for mortgage B.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| price | Home price | The price of the home. |
| down | Down payment | The cash you put down; the loan is the price minus this. |
| ratea | Mortgage A rate | The fixed yearly interest rate of mortgage A. |
| yearsa | Mortgage A term (years) | The length of mortgage A in years, for example 15 or 30. |
| pointsa | Mortgage A points | Discount points paid for mortgage A; 1 point is 1% of the loan. |
| feesa | Mortgage A lender fees | Origination and other lender fees for mortgage A, paid at closing. |
| rateb | Mortgage B rate | The fixed yearly interest rate of mortgage B. |
| yearsb | Mortgage B term (years) | The length of mortgage B in years, for example 15 or 30. |
| pointsb | Mortgage B points | Discount points paid for mortgage B; 1 point is 1% of the loan. |
| feesb | Mortgage B lender fees | Origination and other lender fees for mortgage B, paid at closing. |
| keep | Years you keep the mortgage | Compare the cost over this many years, for example until you expect to sell or refinance. Leave empty for each loan’s full term. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| saving | The cheaper mortgage saves | The difference between the two costs. |
| best | Cheaper mortgage | The mortgage with the lower points, fees and interest. |
| loan | Loan amount | Home price − down payment. |
| paymentA | Mortgage A monthly payment | Principal and interest: L × r ÷ (1 − (1 + r)^−n). |
| paymentB | Mortgage B monthly payment | Principal and interest: L × r ÷ (1 − (1 + r)^−n). |
| costA | Mortgage A cost | Points + fees + interest paid over the years kept. |
| costB | Mortgage B cost | Points + fees + interest paid over the years kept. |
| pointsA | Mortgage A points | Points × loan ÷ 100. |
| pointsB | Mortgage B points | Points × loan ÷ 100. |
| interestA | Mortgage A interest | Interest paid over the years kept. |
| interestB | Mortgage B interest | Interest paid over the years kept. |
| aprA | Mortgage A APR | The yearly rate with points and fees counted (Regulation Z). |
| aprB | Mortgage B APR | The yearly rate with points and fees counted (Regulation Z). |
| balanceA | Mortgage A balance left | What you still owe on mortgage A when you stop comparing. |
| balanceB | Mortgage B balance left | What you still owe on mortgage B when you stop comparing. |
| months | Months compared | The months the costs cover. |

## Method

Loan L = price − down; for each mortgage: payment = L × r ÷ (1 − (1 + r)^−n), r = rate ÷ 1200, n = years × 12; cost = points × L ÷ 100 + fees + interest paid in the months kept; APR = 1200 × j where the payments at monthly rate j are worth L − points − fees.

## Assumptions

- Both mortgages are for the same loan, at a fixed rate, with monthly payments at the end of each month.
- Points and fees are paid in cash at closing; they are not added to the loan.
- The payment is principal and interest only: no property tax, insurance or mortgage insurance.
- The cost over the years kept counts points, fees and interest, not the principal you repay. Type the rates you are offered; no live rates.

## Worked examples

1. price = $400,000.00, down = $80,000.00, ratea = 6.5%, yearsa = 30, pointsa = $0.00, feesa = $0.00, rateb = 6.125%, yearsb = 30, pointsb = $1.00, feesb = $0.00 gives loan = $320,000.00, paymentA = $2,022.62, paymentB = $1,944.35, pointsb = $3,200.00, costA = $408,142.36, costB = $383,167.34, aprB = 6.219702%, best = Mortgage B. Source: Consumer Financial Protection Bureau, What are (discount) points and lender credits and how do they work? https://www.consumerfinance.gov/ask-cfpb/what-are-discount-points-and-lender-credits-and-how-do-they-work-en-136/ (retrieved 2026-10-05); Consumer Financial Protection Bureau, Regulation Z, 12 CFR 1026, Appendix J: annual percentage rate computations for closed-end credit transactions (actuarial method), https://www.consumerfinance.gov/rules-policy/regulations/1026/j/ (retrieved 2026-10-05).
2. price = $400,000.00, down = $80,000.00, ratea = 6.5%, yearsa = 30, pointsa = $0.00, feesa = $0.00, rateb = 6.125%, yearsb = 30, pointsb = $1.00, feesb = $0.00, keep = 3 gives costA = $61,349.41, costB = $60,939.50, balanceA = $308,535.17, months = 36. Source: Consumer Financial Protection Bureau, What are (discount) points and lender credits and how do they work? https://www.consumerfinance.gov/ask-cfpb/what-are-discount-points-and-lender-credits-and-how-do-they-work-en-136/ (retrieved 2026-10-05).
3. price = $300,000.00, down = $60,000.00, ratea = 6%, yearsa = 15, pointsa = $0.00, feesa = $1,500.00, rateb = 6.75%, yearsb = 30, pointsb = $0.00, feesb = $1,500.00 gives paymentA = $2,025.26, paymentB = $1,556.64, costA = $126,046.15, costB = $321,888.76, aprA = 6.098066%, aprB = 6.811289%. Source: Consumer Financial Protection Bureau, Regulation Z, 12 CFR 1026, Appendix J: annual percentage rate computations for closed-end credit transactions (actuarial method), https://www.consumerfinance.gov/rules-policy/regulations/1026/j/ (retrieved 2026-10-05).

## FAQ

### How do I compare two mortgage offers?

Compare what each costs over the years you expect to keep the loan: points, lender fees and the interest you pay in that time. The CFPB suggests comparing Loan Estimates from several lenders.

### Are points worth paying?

Points lower the rate in exchange for cash at closing. They pay off only if you keep the loan long enough. On a $320,000 loan, 1 point ($3,200) for 6.125% instead of 6.5% saves about $78 a month, so it pays for itself in about 3 years.

### Is a 15-year mortgage cheaper than a 30-year one?

It costs far less interest but has a higher payment. On $240,000, 6% over 15 years is $2,025.26 a month with $124,546 of interest; 6.75% over 30 years is $1,556.64 with $320,389.

### Why is the APR higher than the rate?

The APR counts points and fees as well as interest: it is the yearly rate at which the payments repay the loan minus those costs (Regulation Z, actuarial method).

### Does the payment include taxes and insurance?

No. It is principal and interest only. Property tax, homeowners insurance and mortgage insurance are the same or close for both offers on the same home; add them to see your full payment.

### Does the calculator use today’s mortgage rates?

No. Type the rates from your Loan Estimates; the site shows no live rates.

## Sources

- Consumer Financial Protection Bureau, What are (discount) points and lender credits and how do they work? https://www.consumerfinance.gov/ask-cfpb/what-are-discount-points-and-lender-credits-and-how-do-they-work-en-136/ (retrieved 2026-10-05)
- Consumer Financial Protection Bureau, Regulation Z, 12 CFR 1026, Appendix J: annual percentage rate computations for closed-end credit transactions. https://www.consumerfinance.gov/rules-policy/regulations/1026/j/ (retrieved 2026-10-05)