Mortgage Loan Comparison Calculator

What Can This Mortgage Comparison Calculator Help You Do?

This mortgage comparison calculator helps U.S. home buyers and homeowners estimate the real monthly and long-term cost of two mortgage scenarios side by side. You can compare different home prices, down payments, loan terms, interest rates, property tax rates, insurance costs, PMI, closing costs, HOA fees, and extra payments.

It is especially useful if you are trying to decide between a 15-year vs. 30-year mortgage, a lower down payment vs. 20% down, or whether making extra monthly payments is worth it. The calculator shows monthly payments, total interest, estimated payoff date, Real APR, total out-of-pocket cost, amortization schedules, and charts for both loans.

You Can Use This Calculator to:

• Compare two mortgage options side by side.
• Estimate monthly principal and interest payments.
• Add property tax, homeowners insurance, PMI, HOA fees, and other recurring costs.
• Estimate total out-of-pocket housing cost over the life of the loan.
• Compare a 15-year mortgage vs. a 30-year mortgage.
• Model extra monthly, yearly, or one-time principal payments.
• Estimate how extra payments may shorten your payoff timeline.
• Calculate interest-only periods and payment deferral scenarios.
• Generate monthly and annual amortization schedules.
• Compare fixed-rate loans or multi-rate loan scenarios using 2-rate or 3-rate sections.
• Estimate when PMI may stop based on the loan-to-value ratio.

The calculator is designed for U.S. mortgage planning. It uses common U.S. mortgage inputs such as property tax, homeowners insurance, PMI, HOA, closing costs, and loan terms in years and months.

How This Calculator Estimates Real APR

The “Real APR” shown in this calculator is not the same as the lender-disclosed APR on a Loan Estimate. A lender APR usually includes certain finance charges, but typically does not include property taxes, homeowners insurance, HOA fees, or other ownership costs.

In this calculator, Real APR is a broader “real out-of-pocket APR.” It estimates the annualized rate that makes the present value of all monthly out-of-pocket payments equal to the net loan proceeds after upfront closing costs.

Real APR Formula Used by This Calculator

The calculator solves for the monthly internal rate of return i using this equation:

Where:

• P = loan principal
• C = upfront closing costs
• T = actual number of payment months until payoff
• A_m = total out-of-pocket payment in month m
• i = monthly IRR solved by the calculator

The calculator then converts the monthly IRR into a nominal annual APR:

This calculator intentionally uses nominal APR, not effective annual rate. In the JavaScript logic, it does not use (1 + i)¹² − 1. Instead, it annualizes the monthly IRR by multiplying by 12.

What Monthly Payments Are Included in Real APR?

For Real APR, the calculator uses the monthly out-of-pocket payment from the amortization schedule. This may include:

• Scheduled principal and interest
• Extra monthly payments
• Extra yearly payments
• One-time extra payments
• Property tax
• Homeowners insurance
• PMI insurance, if applicable
• HOA fees
• Other annual housing costs

Closing costs are treated as an upfront cost and reduce the net proceeds of the loan in the Real APR calculation.

Example: $400,000 Loan at 6.65% for 30 Years

Assume the following mortgage scenario:

• Home Price: $450,000
• Loan amount: $400,000
• Interest rate: 6.65%
• Loan term: 30 years
• Property tax: 0.84% per year
• Closing costs: $2,200
• Annual PMI insurance: $1,200
• Annual other costs: $3,000

First, the calculator computes the standard monthly principal and interest payment:

Where:

• P = 400,000
• r = 6.65% ÷ 12 = 0.0055417
• n = 360

The estimated principal and interest payment is about $2,567.86 per month.

The calculator then adds monthly ownership costs:

• Property tax: $450,000 × 0.84% ÷ 12 = $315/month
• PMI: $1,200 ÷ 12 = $100/month, while PMI is active
• Other costs: $3,000 ÷ 12 = $250/month

So the early monthly out-of-pocket payment is approximately:

In this example, the initial monthly out-of-pocket payment is about $3,232.86. Once PMI drops off, the monthly out-of-pocket payment falls to about $3,132.86, assuming no other cost changes.

For Real APR, the calculator treats the $2,200 closing costs as an upfront cost:

Then it solves for the monthly rate i that makes the present value of the monthly out-of-pocket payments equal to $397,800:

Equivalently:

Solving for i:

Therefore:

Using the calculator’s cash-flow method, the estimated Real APR is approximately 8.9427%. This is higher than the note rate of 6.65% because it includes closing costs and recurring ownership costs such as property tax, PMI, and other annual costs.

Important: this Real APR is intended for personal affordability and comparison purposes. It should not be treated as the official APR disclosed by a lender.

Loan Comparison Calculator FAQ

How Is a Monthly Mortgage Payment Calculated in the U.S.?

A typical U.S. mortgage payment consists of four parts, commonly known as PITI: Principal, Interest, Property Tax, and Insurance. The principal and interest portion is calculated using the standard amortization formula:

In this formula, P is the loan amount, r is the monthly interest rate, and n is the total number of monthly payments.

For example, with a $200,000 loan, a 6.66% interest rate, and a 30-year term, the monthly principal and interest payment is approximately $1,285.25. After adding property tax and homeowners insurance, the total monthly payment may be around $1,585.25. You can use the calculator above to get more precise numbers based on your own inputs.

What Is the Difference Between Putting 20% Down and 10% Down?

The down payment directly affects both the loan amount and whether PMI, or Private Mortgage Insurance, is required.

For example, on a $400,000 home, a 20% down payment is $80,000, leaving a $320,000 loan amount. In this case, PMI is usually not required. A 10% down payment is $40,000, leaving a $360,000 loan amount. Because the down payment is below 20%, the borrower may need to pay PMI.

If PMI is estimated at 0.5% of the loan amount per year, the 10% down payment scenario would add about $150 per month in PMI. In this example, the monthly payment with 10% down may be about $500 higher than with 20% down, including PMI.

However, putting only 10% down also allows the buyer to keep more cash available for an emergency fund, renovations, moving costs, or investments. PMI can usually be requested for cancellation once the loan balance falls below 80% of the home’s value.

Is a 15-year Mortgage Better Than a 30-year Mortgage?

A 15-year mortgage and a 30-year mortgage each have advantages and disadvantages, depending on your financial situation.

The main advantage of a 15-year mortgage is that the total interest cost is usually much lower, often by about 55% to 60%. For example, on a $300,000 loan at a 6.65% interest rate, the total interest on a 15-year mortgage may be about $233,149.69, compared with about $524,429.42 on a 30-year mortgage. That is a potential interest savings of about $291,279.73. A 15-year mortgage also often comes with a lower interest rate.

The main advantage of a 30-year mortgage is the lower monthly payment, usually about 35% to 40% lower than a 15-year payment. This gives borrowers more cash-flow flexibility. Some buyers prefer a 30-year mortgage and invest extra cash elsewhere, such as in the stock market, where long-term average returns are often estimated at around 8% to 10%.

As a general guideline, if the monthly mortgage payment can stay below 25% of gross income, a 15-year mortgage may be a strong option. Otherwise, a 30-year fixed mortgage with optional extra principal payments can be a flexible compromise.

What Are Closing Costs and How Much Do They Cost?

Closing costs are the extra costs paid when buying a home, in addition to the down payment. In the U.S., closing costs usually range from about 2% to 5% of the home purchase price.

Common closing costs include:

• Loan-related fees: loan origination fee, usually around 0.5% to 1%; appraisal fee, usually about $300 to $600; and credit report fee, usually about $30 to $50.
• Title-related fees: title search and title insurance, often around $1,000 to $3,000; and attorney fees in states where an attorney is required.
• Government fees: recording fees and transfer taxes, which vary by state and local government.
• Prepaid items: prepaid property tax, often 2 to 6 months; prepaid homeowners insurance, often 1 year; and prepaid interest through the end of the month.
• Escrow setup: reserves required by the lender for future property tax and insurance payments.

For example, on a $500,000 home, closing costs may be around $10,000 to $25,000. Some costs may be negotiable, and in some transactions the seller may agree to pay part of the buyer’s closing costs through seller concessions.

Does the Down Payment Affect the Mortgage Interest Rate?

Yes. The down payment can directly affect the mortgage interest rate. In general, a larger down payment can help the borrower qualify for a lower interest rate because the lender takes on less risk.

Typical rate differences may look like this:

• 20% or more down: usually qualifies for the best available rates.
• 10% to 19% down: the rate may be about 0.125% higher.
• 5% to 9% down: the rate may be about 0.25% higher.
• 3% to 5% down: the rate may be about 0.375% higher.

For example, on a $400,000 loan with a 30-year term, a 0.25% rate difference, such as 6.75% versus 7.00%, could mean paying about $24,054 more in interest over the life of the loan.

In addition, down payments below 20% usually require PMI, which further increases the monthly payment. Even if you cannot reach 20% down immediately, each additional amount you put down may help you get better loan pricing.

What Are Current Mortgage Rates in the United States?

U.S. mortgage rates change daily and are affected by the Federal Reserve’s federal funds rate, Treasury yields, inflation expectations, lender pricing, and broader financial market conditions.

As of September 2026, the 30-year fixed mortgage rate is approximately 6.5% to 7.0%, while the 15-year fixed mortgage rate is approximately 5.75% to 6.25%.

The actual rate you receive depends on factors such as your FICO score, down payment, loan amount, debt-to-income ratio, occupancy type, and loan program. Borrowers with a credit score of 740 or higher typically qualify for the most competitive rates.

To follow current market trends, you can check Freddie Mac’s weekly Primary Mortgage Market Survey, also known as PMMS. It is also recommended to compare quotes from at least three lenders, including rates, points, lender fees, and total closing costs.

How Much Interest Can Extra Mortgage Payments Save?

Extra mortgage payments can create significant savings because they directly reduce the principal balance. Once the principal balance is lower, less interest accrues in future months.

For example, on a $400,000 loan with a 6.6% interest rate and a 30-year term:

• Paying an extra $200 per month could help pay off the loan about 5 years and 7 months early and save approximately $114,746.47 in interest.
• Paying an extra $500 per month could help pay off the loan about 10 years and 7 months early and save approximately $210,303.02 in interest.

A good strategy is to make extra principal payments early in the loan term or make a lump-sum extra payment when you receive a bonus or other one-time income.

Before making extra payments, confirm that your loan does not have a prepayment penalty. Most standard U.S. conventional mortgages do not have this restriction, but it is still worth checking your loan documents or asking your loan servicer.

How Is Property Tax Calculated in the U.S.?

Property tax is collected by local governments, and the rate varies by state, county, city, school district, and special assessment area. The national average effective property tax rate is about 1.1%.

The basic formula is:

Property Tax = Assessed Value × Local Tax Rate

For example, if a home has an assessed value of $500,000 and the effective tax rate is 1.1%, the annual property tax would be $5,500, or about $458 per month.

States with relatively high property tax rates include New Jersey, about 2.47%; Illinois, about 2.23%; and Texas, about 1.80%. States with relatively low property tax rates include Hawaii, about 0.28%; Alabama, about 0.41%; and Colorado, about 0.51%.

Keep in mind that assessed value is not always the same as market value. Some states reassess property every year, while others reassess only every few years. Property tax may be deductible on federal income taxes if you itemize deductions, but the SALT deduction is capped at $10,000.

What Is PMI and When Can It Be Removed?

PMI stands for Private Mortgage Insurance. It is usually required on conventional loans when the down payment is below 20%. PMI protects the lender, not the borrower, if the borrower defaults.

PMI usually costs about 0.3% to 1.5% of the loan balance per year, depending on credit score, down payment, loan type, and lender pricing.

Under the Homeowners Protection Act, borrowers may generally request PMI cancellation in writing when the loan balance reaches 80% of the home’s original value, assuming the loan is current and other lender requirements are met. PMI must generally be automatically terminated when the loan balance reaches 78% of the home’s original value, subject to certain conditions.

Some homeowners may also request early PMI removal by getting a new appraisal to show that the home has increased in value and the loan-to-value ratio is now below 80%. Lender rules vary, so borrowers should confirm the specific requirements with their loan servicer.

Common ways to avoid PMI include making a 20% down payment, using an 80-10-10 piggyback loan, or choosing lender-paid PMI in exchange for a slightly higher interest rate.

How Much Mortgage Payment Can I Afford?

A common guideline in the U.S. mortgage industry is the 28/36 rule. This rule suggests that total housing costs, including principal, interest, property tax, and insurance, should generally stay below 28% of gross monthly income. Total monthly debt payments, including mortgage, car loans, student loans, and minimum credit card payments, should generally stay below 36% of gross monthly income.

For example, if a household has gross monthly income of $15,000, the suggested upper limit for total monthly housing costs would be about $4,200.

Lenders may approve borrowers with a debt-to-income ratio, or DTI, of up to about 43% to 45%, depending on the loan program and borrower profile. However, approval does not always mean the payment is comfortable.

A more conservative approach is to keep total housing costs below 25% of after-tax income. This leaves more room for retirement savings, emergency savings, childcare, transportation, healthcare, and general quality of life.

The Consumer Financial Protection Bureau, or CFPB, also provides free home affordability and homebuying resources at consumerfinance.gov.