Fixed-Rate Loan Cost Comparison
Compare two fixed-rate loans with the same principal, each full term, cash-paid upfront fees and quoted borrower mortgage insurance for its entered months.
What This Calculator Does
Compare covered cash costs for two fixed-rate, fully amortizing loan offers with the same principal. Each runs through its own full term, with one-time cash-paid fees and a supplied level monthly mortgage-insurance premium for the first entered payments. See principal/interest separately from the initial payment including insurance. Costs within $1 are close under this model, not identical offers.
Who Is This For
For borrowers and real-estate professionals reviewing comparable lender quotes. Use supplied note rates, terms, cash fees and insurance facts; the result does not establish approval, affordability or the best economic choice for an earlier sale/refinance.
How It Works
Enter a positive common principal. For A and B, enter fixed nominal annual note rate, amortization years, cash-paid upfront costs, borrower-paid monthly insurance and its first-payment count. Enter 0 amount and 0 months only when no additional monthly premium is confirmed. Confirm the scope, then compare principal/interest payments, initial insured payments, covered own-term totals and the signed A-minus-B differences.
Frequently Asked Questions
What costs are covered, and why can loan terms differ?
Each offer's scheduled principal and interest over its own full amortization term, plus entered cash-paid upfront fees and level borrower-paid monthly mortgage insurance for its first K payments. The common principal is included once. Different terms are deliberate; this is not a same-date early payoff or discounted-economic comparison. Property tax, home insurance, association costs, income-tax benefits and other excluded ownership costs are not computed.
Can quoted mortgage insurance reverse the lower-cost result?
Yes. For a hypothetical $400,000 loan, A at 6.5% for 30 years with no fees has about $910,177.95 in principal/interest. B at 6.6% for 30 years with no additional borrower insurance has about $919,668.70. Add A's quoted $150 premium for its first 96 payments: $14,400 insurance makes A about $924,577.95, and B lower by about $4,909.26 before display reconciliation. The initial insured payments are about $2,678.27 versus $2,554.64. These are supplied examples, not market premiums or a legal cancellation period.
Does a lower monthly payment mean a lower full-term cost?
No. Illustrative $400,000 principal, A at 6.5% over 30 years with $2,000 cash fees and B at 6% over 15 years with $4,000 cash fees, both without monthly insurance: A's principal/interest is about $2,528.27 monthly versus B's $3,375.43. Covered lifetime costs are about $912,177.95 versus $611,576.92. The lower monthly payment has the higher full-term total; affordability and the value of payment timing need separate consideration.
How should I enter upfront fees and lender-paid insurance?
Use nonnegative loan-related costs actually paid in cash, counted once and not financed. A one-time cash insurance premium belongs in upfront costs once, not as an invented monthly premium too. Include quoted loan-dependent third-party costs in this basis; exclude recoverable escrow balances and duplicates. If the lender already pays insurance through the quoted note rate, additional borrower-paid monthly insurance is 0 only when confirmed. Different principals, financed fees or incompatible credits need another comparable analysis.
What does the insurance payment count mean?
A supplied constant borrower premium applies to the first K scheduled payments. Positive premium requires 1 through that loan's term in years times 12; no additional premium requires explicit 0 amount and 0 count. The input is not an appraisal/LTV rule or cancellation calculation, and it does not guarantee termination. Declining, delayed or variable premiums are outside this simple stream. The initial principal/interest-plus-insurance payment is not a permanent or total housing payment.
What does the within-$1 result mean?
The raw covered lifetime-cost difference must exceed $1 in magnitude to select A or B as lower. A difference of $0.99 or exactly $1 is labeled close; $1.01 is outside that policy. The signed difference still appears, with A minus B positive when A costs more. Close costs are not identical loans, an exact equality claim, approval or a universal finance threshold. The rule is applied before display rounding.
Are explicit 0% rates and zero insurance allowed?
Yes, as supplied mathematical or hypothetical quote facts, not a market-rate claim. At 0%, total principal/interest equals principal and interest is exactly 0; cash fees and quoted insurance still cost money. A $120,000 loan at 0% has $1,000 principal/interest over 10 years versus about $333.33 over 30 years, but the same $120,000 principal total before fees/insurance. Blank amounts are not confirmed zero, and zero principal is not a loan comparison.
How do rounding and excluded features affect the decision?
Money inputs preserve cents; rates allow four decimals. Theoretical payment/interest and covered own-term costs stay unrounded for ranking. Displayed totals and their separately rounded difference can differ by a cent; do not rebuild the result from rounded monthly payments. This is not a servicer's cent ledger, APR, break-even, early payoff, NPV, equity, variable-rate, income-tax or loan-approval calculation. Use a separate analysis for sale/refinancing before the full term or a different cash-flow stream.