Loan Comparison Calculator
Compare 2 or 3 loan offers by monthly payment, total interest, and total cost. Calculate the true cost including origination fees, points, and closing costs. See which loan actually saves you money. Works with any currency.
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How to Use This Calculator
Tab "Compare 2 Loans"
Enter the loan amount, interest rate, and term in years for Loan A and Loan B. The calculator shows the monthly payment, total interest, and total cost for each loan. The winner is highlighted based on lowest total cost.
Tab "Compare 3 Loans"
Same as above, but for three loans. Each loan gets its own amount, rate, and term. Results are ranked by total cost from cheapest to most expensive so you can see at a glance which offer saves the most money.
Tab "True Cost (with Fees)"
Enter two loans with their upfront fees (origination fees, discount points, closing costs). The calculator computes the effective APR for each loan — the true annual cost including fees — and shows the break-even month where lower monthly payments offset the higher upfront fees.
The Formulas
M = P × [r(1+r)n] / [(1+r)n − 1]
where P = principal, r = monthly rate (annual rate / 12 / 100), n = total months
Total interest:
Total Interest = M × n − P
Total cost:
Total Cost = P + Total Interest (+ Fees if applicable)
Effective APR (with fees):
Solve for r where: PV of all monthly payments at rate r = Loan Amount − Fees
Solved iteratively using Newton-Raphson method. APR = r × 12
Break-even month:
Break-even = (Higher Fees − Lower Fees) / (Higher Monthly Payment − Lower Monthly Payment)
All calculations are universal and pre-tax. No country-specific tax deductions or insurance costs are applied. Results are estimates.
Worked Examples
Example 1 — 30-year vs 15-year mortgage: $300K at different rates
Loan A is a 30-year mortgage at 5.5%. Loan B is a 15-year mortgage at 5.25%. Both for $300,000.
Despite a $708 higher monthly payment, the 15-year loan costs $179K less in total because it accrues interest for half the time. If you can afford the higher payment, the shorter term saves significantly.
Example 2 — 3 lender offers ranked: Bank vs Credit Union vs Online
Three lenders offer $300,000 for 30 years at different rates with different fee structures.
The Online Lender has the highest fees but the lowest rate, making it the cheapest over the full 30-year term. The Credit Union’s lowest fees cannot overcome its higher rate.
Example 3 — True cost: 5.0% with $8K fees vs 5.5% with $0 fees
Two $300,000 loans for 30 years. Loan A has a lower rate but $8,000 in fees. Loan B has a higher rate but no fees.
Loan A’s effective APR is 5.18% — lower than Loan B’s 5.50%. However, you need to keep the loan for at least 86 months (about 7 years) for the lower payment to recoup the $8,000 in fees. If you plan to sell or refinance before month 86, Loan B is the better choice.
Understanding Loan Comparisons
Why Total Cost Matters More Than Monthly Payment
A lower monthly payment feels better, but it often means a longer term and more total interest. A 30-year loan at 5.5% costs over $313K in interest on $300K borrowed — more than the loan itself. The same amount at 5.25% for 15 years costs only $134K in interest. Always compare total cost, not just the monthly payment.
Interest Rate vs APR
The interest rate is the cost of borrowing the principal. The APR includes the interest rate plus upfront fees spread over the loan term. Two loans with the same interest rate but different fees will have different APRs. APR is the fairer comparison metric because it reflects the true cost of borrowing.
When Fees Are Worth Paying
Paying upfront fees (points, origination fees) to get a lower rate makes sense if you keep the loan long enough to recoup the costs. The break-even month tells you exactly when. If you plan to stay in the home or keep the loan past the break-even point, paying fees for a lower rate is the better deal.
Shorter Terms Save Money
A shorter loan term means higher monthly payments but dramatically less total interest. A 15-year mortgage at a slightly lower rate can save $150K–$200K compared to a 30-year mortgage. If your budget can handle the higher payment, the shorter term is almost always the better financial choice.