AtlasCalcsUtility Calculation Suite
2026-09-21 7 min read

Mortgage Comparison Calculator

Two mortgage offers priced side by side on total cost for a mortgage. Live calculator with worked steps, charts.

Calculator

Home Price Help
$

The purchase price of the property.

Down Payment(%)
%
Option A — Interest Rate(%)
%
Option A — Term(years)
years
Option B — Interest Rate(%)
%
Option B — Term(years)
years
Advanced options (1)
Flat Fees & Closing Costs
$

This prepayment & payoff calculator runs on the standard amortisation model: interest is charged on the outstanding balance each month, and anything extra you enter is applied to principal immediately.

Results

Normal

Option A — Payment

$1,939.18/month

6.10% over 30 years.

Option B — Payment

$2,614.67/month

5.50% over 15 years.

Option A — Total Interest

$378,106

Option B — Total Interest

$150,640

Option A — All-In Cost

$378,706

Option B — All-In Cost

$151,240

Total Cost Difference

$227,466

Option B is cheaper.

Cheaper Option

Option B

Saves $227,466 over the full term.

Live results update as you type — currently showing option a — payment of $1,939.18 /month on 12 payments a year. Replace the defaults with your own quote for an exact comparison.

Visualizations

All-In Cost by Option

378,706Option A
151,240Option B

Total Interest by Option

Option A interest72%
Option B interest28%

Formula

Any structure that delays principal repayment keeps the balance higher for longer, and because interest is charged on the balance, the total cost rises. Conversely, anything that accelerates repayment — a shorter term, an extra principal payment, a faster frequency — lowers the average balance and therefore the finance charge.

See the worked steps below for the exact relationship used

Variables

SymbolNameUnitDescription
AAmountcurrencyBalance or amount involved in the calculation
iPeriodic ratedecimalAnnual rate ÷ periods per year
nNumber of periodscountTerm in payments

Explanation

Any structure that delays principal repayment keeps the balance higher for longer, and because interest is charged on the balance, the total cost rises. Conversely, anything that accelerates repayment — a shorter term, an extra principal payment, a faster frequency — lowers the average balance and therefore the finance charge.

Step-by-Step Calculation

Follow each step to understand how the result is calculated from your inputs.

Step 1

Price both structures on the same loan amount.

P = A × i ÷ (1 − (1 + i)^−n)
A:6.10% / 30y
B:5.50% / 15y
Result: $1,939.18 vs $2,614.67
Step 2

Total the finance charge for each option.

Interest = payment × n − loan
Result: $378,106 vs $150,640
Step 3

Add fees and choose the lower all-in cost.

All-in = interest + fees
Result: Option B by $227,466
Final Answer
$1,939.18

Worked Examples

See how the calculator works with different scenarios.

Scenario

The mortgage comparison calculator run on the values above, showing the full calculation path rather than only the answer.

Calculation

1. Price both structures on the same loan amount. → $1,939.18 vs $2,614.67 2. Total the finance charge for each option. → $378,106 vs $150,640 3. Add fees and choose the lower all-in cost. → Option B by $227,466

Result

Option A — Payment: $1,939.18 /month

Interpretation

Option B costs $151,240 versus $378,706 — a $227,466 difference on $320,000.

Understanding Your Result

Your Result: Option A — Payment: $1,939.18 /month

Typical range: A 15-year mortgage typically carries a rate 0.5–0.75 points below a 30-year and cuts total interest by more than half.

What This Means

Any structure that delays principal repayment keeps the balance higher for longer, and because interest is charged on the balance, the total cost rises. Conversely, anything that accelerates repayment — a shorter term, an extra principal payment, a faster frequency — lowers the average balance and therefore the finance charge.

Why It Matters

Option B costs $151,240 versus $378,706 — a $227,466 difference on $320,000.

Professional Interpretation

Option B costs $151,240 versus $378,706 — a $227,466 difference on $320,000.

How this is calculated

Any structure that delays principal repayment keeps the balance higher for longer, and because interest is charged on the balance, the total cost rises. Conversely, anything that accelerates repayment — a shorter term, an extra principal payment, a faster frequency — lowers the average balance and therefore the finance charge.

What drives the result

Any structure that delays principal repayment keeps the balance higher for longer, and because interest is charged on the balance, the total cost rises. Conversely, anything that accelerates repayment — a shorter term, an extra principal payment, a faster frequency — lowers the average balance and therefore the finance charge.

Recommendations

  • •Compare at the same lock date and with identical fee assumptions, or the comparison is noise.
  • •Weigh cash-flow safety against cost: the 30-year wins on flexibility, the 15-year on total cost.

Educational Content

Introduction

Loan structure determines when cash leaves your account and how much flexibility you keep. Interest-only periods, balloons, deferred starts, graduating payments, refinancing and biweekly schedules all change the timing of principal repayment without changing the formula behind it. This page prices the structure, not just the rate.

Concept Explanation

Any structure that delays principal repayment keeps the balance higher for longer, and because interest is charged on the balance, the total cost rises. Conversely, anything that accelerates repayment — a shorter term, an extra principal payment, a faster frequency — lowers the average balance and therefore the finance charge.

Applications

▸Choosing between a lower payment now and a lower total cost
▸Testing whether refinancing or restructuring is worth the fees
▸Planning around a balloon, a reset date or the end of a promotional period
▸Deciding how much extra to pay and whether it is better used to invest

Benefits

  • •Prices structures that are hard to compare by eye
  • •Shows the payment step-up or lump sum you must plan for
  • •Quantifies the break-even point on any restructuring cost
  • •Separates cash-flow relief from genuine savings

Limitations

  • •Assumes rates, income and repayment behaviour stay as entered
  • •Lender-specific rules (recast fees, minimum payments, penalties) are not automatic
  • •Tax treatment of interest, penalty and forgiven amounts is not included
  • •Real-life events such as a sale or refinance can change the outcome entirely

Best Practices

  • •Match repayment to the life of the asset being financed
  • •Write down the exit plan for any balloon or reset before signing
  • •Compare structures on total cost over the horizon you will actually hold
  • •Keep a cash buffer instead of pushing every dollar into principal

Common Misconceptions

Myth: A lower payment is always a win
Truth: Lower payments usually mean more periods and more interest unless the rate falls enough to compensate.
Myth: Structures are set in stone
Truth: Many loans allow recasting, extra payments or rate renegotiation — ask before assuming.

Practical Tips

  • •Match repayment to the life of the asset being financed
  • •Write down the exit plan for any balloon or reset before signing
  • •Compare structures on total cost over the horizon you will actually hold

Common Mistakes

A lower payment is always a win
Lower payments usually mean more periods and more interest unless the rate falls enough to compensate.
Structures are set in stone
Many loans allow recasting, extra payments or rate renegotiation — ask before assuming.

Assumptions

This calculator makes the following assumptions to provide estimates:

Figures as entered: The result follows directly from the values you supplied.

Limitations

Be aware of these limitations when using this calculator:

Limitation: Assumes rates, income and repayment behaviour stay as entered
Limitation: Lender-specific rules (recast fees, minimum payments, penalties) are not automatic
Limitation: Tax treatment of interest, penalty and forgiven amounts is not included
Limitation: Real-life events such as a sale or refinance can change the outcome entirely

Frequently Asked Questions

Answers to common questions about this calculator.

Who uses the mortgage comparison calculator?
It is used by home buyers comparing mortgage offers, by owners weighing a refinance or equity move, and by loan officers and advisers sanity-checking a payment, ratio or fee structure. It sits in the Prepayment & Payoff group of the Mortgage & Home Finance section of Atlascalcs.
How accurate is the mortgage comparison calculator?
Every figure follows directly from the inputs using standard amortisation mathematics, so it is accurate to the quality of the values you enter. Lenders round payments and apply their own day-count conventions, so expect small differences against a formal statement or payoff quote.
How current are the rates and thresholds used here?
The calculator uses the figures you enter, so update the rate to your actual offer or current market quote. Ratio thresholds, poverty guidelines and programme rules reflect the conventions described in the references and change periodically.
Does rounding change the results?
Every calculation runs on full precision and rounds only for display. Lenders round payments to the nearest cent or dollar, so expect a small difference between these figures and a formal statement or payoff quote.
Should I use the payment or the total cost to compare offers?
Use the payment to judge cash flow and the finance charge or APR to judge cost. When two offers differ on both, the all-in cost over the period you expect to hold the loan is the decisive measure.
Can I use this calculator for a business or commercial loan?
Yes. The payment, amortisation, ratio and cost calculators apply the same amortisation mathematics to commercial loans; the difference is in the fees, covenants and collateral rules, which you should enter explicitly.
What information should I have ready before applying?
Your exact rate and term, the fee schedule, any required add-ons, and your gross income and existing monthly obligations. With those five numbers every figure on this page can be tied back to a lender quote.

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Related Guides

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Glossary

Technical terms used in mortgage calculations explained in plain language.

Principal
The amount borrowed, excluding interest and fees. Payments applied to principal reduce the balance and therefore future interest.
Amortisation
Repaying a debt through a schedule of payments that gradually shifts the split from interest to principal until the balance reaches zero.
APR (Annual Percentage Rate)
The yearly cost of credit expressed as a rate, including interest and most upfront finance charges.
Finance charge
The total dollar cost of credit, including interest and certain fees.

Authoritative References

Trusted sources and standards referenced by this calculator.

Applicable Standards

Level-payment (simple-interest) amortisation, payments assumed in arrearsAPR computed by discounting the actual payment stream to net proceedsDebt ratios computed on gross income for lender comparisonsMoney rounded for display only; all calculations run at full precision

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Page Information

Last Updated:

2026-09-21

Version:

2.0.0

License:

Free to use for educational and professional purposes.