Home Loan Comparison Calculator: Compare Payments

A home loan comparison calculator estimates the monthly principal-and-interest payment and total interest for one fixed-rate mortgage using the loan amount, APR, and term you enter. Use it to compare scenarios by changing one input at a time; it does not compare lender offers or include taxes, insurance, or other housing costs.

Formula

The calculator first converts the annual percentage rate to a monthly rate, then calculates a level monthly payment that repays the principal and interest over the selected number of months:

• Monthly rate: r = APR / 1200, where APR is entered as a percentage per year.
• Number of payments: n = years × 12.
• Monthly payment: M = P × r / [1 − (1 + r)⁻ⁿ], rounded to the nearest cent.
• Total interest: I = (M × n) − P, using the rounded monthly payment.

P is the starting loan principal in dollars, r is the monthly interest rate as a decimal, n is the payment count in months, M is the monthly principal-and-interest payment in dollars, and I is total interest in dollars over the full schedule. The APR is an input, not an estimate of a current or typical rate; use a figure supplied in a loan disclosure when modelling a specific offer.

Worked Example

Using the calculator defaults: P = $200,000, APR = 6.5%, and term = 30 years.

1. Convert the APR to a monthly decimal rate: r = 6.5 / 1200 = 0.0054166667.
2. Convert the term to months: n = 30 × 12 = 360.
3. Substitute into the payment formula: M = 200,000 × 0.0054166667 / [1 − (1.0054166667)⁻³⁶⁰].
4. The payment before rounding is about $1,264.14, so the monthly payment is $1,264.14.
5. Total interest is $1,264.14 × 360 − $200,000 = $255,090.40.

These figures describe only the calculator’s fixed-rate arithmetic. A real payment schedule may differ if its rate, payment dates, rounding method, or loan structure differs.

How to Compare Home Loan Scenarios

For a useful comparison, enter each offer’s relevant principal, APR, and term, keeping the other assumptions consistent where possible. If you are comparing two properties or down-payment amounts, the principal may change; if you are comparing loan terms, hold principal and APR constant to see the effect of repayment length. The calculator models one scenario per calculation, so record the results side by side.

• Compare monthly payments: A longer term generally spreads repayment across more months, reducing the calculated payment for the same principal and APR.
• Compare total interest: More payment periods can increase the amount of interest paid over the full term, even when each payment is lower.
• Change one variable at a time: This makes it easier to see whether a difference comes from principal, APR, or term.
• Use matching definitions: Check whether a quoted rate is an APR and whether it is fixed for the full period being modelled. Adjustable or introductory rates are not represented as fixed-rate schedules.

For example, a lower monthly payment by itself does not establish that one loan costs less overall. It may reflect a longer term, a smaller principal, or exclusions from the payment calculation. Compare the term and total interest as well as the monthly amount, then use the lender’s written figures for a full offer comparison.

What the Payment Does and Does Not Include

This is a principal-and-interest estimate: each scheduled payment is treated as level, with interest calculated monthly and the remainder reducing principal. It is not the complete monthly cost of owning a home. Depending on the loan and property, a quoted housing payment may also involve items such as property-related charges, homeowners insurance, mortgage insurance, escrow deposits, or association fees. None of those amounts is an input here, so none appears in the result.

Likewise, the calculator does not account for lender fees, closing costs, discount points, prepaid charges, extra payments, missed payments, or changes in an adjustable rate. APR can incorporate certain borrowing costs in a lender’s disclosed calculation, but this calculator uses the APR as a single annual rate in a standard amortization formula; it does not separately model those costs or reproduce a lender’s disclosure. For a meaningful offer comparison, obtain the payment schedule and itemized costs from each lender and check which charges are included.

Common Comparison Mistakes and Limits

• Mixing interest rate and APR: They are related but may not represent the same information. Confirm which figure you are entering and use comparable disclosed figures.
• Comparing different loan amounts: A smaller payment could simply reflect less borrowing, not a different pricing or repayment structure.
• Ignoring term length: A payment comparison without the number of payments can conceal a substantial difference in the repayment timeline and total interest.
• Treating an estimate as an offer: The result does not indicate eligibility, approval, or the terms a lender will provide.
• Rounding or timing differences: The formula rounds the monthly payment to cents and uses that rounded amount for total interest. Actual schedules can have payment-date conventions or final-payment adjustments.

The payment equation assumes a positive APR, equal monthly periods, a constant rate, and regular payments that fully repay principal over the entered term. The input limits allow a broad range for arithmetic, but they do not imply that a lender offers or accepts every combination. For an adjustable-rate loan, a single APR cannot show future payment changes; separate rate scenarios are only illustrations, not a prediction.

Frequently Asked Questions

What does a home loan comparison calculator show?
It estimates the monthly principal-and-interest payment and total interest for the entered principal, APR, and repayment term. It does not evaluate lender offers or include other homeownership costs.

Does the monthly payment include taxes and insurance?
No. The result includes principal and interest only. Enter or obtain any additional payment components separately from the relevant lender or service provider.

Why can a longer mortgage term have a lower payment but more total interest?
The same principal is repaid over more monthly periods, which can lower each scheduled payment while allowing interest to accrue over a longer time. The calculator’s total-interest result reflects that schedule under its fixed-rate assumptions.

Can I compare fixed-rate and adjustable-rate home loans with this calculator?
It can illustrate a fixed-rate scenario using one APR. It cannot model future rate adjustments, caps, or changing payments; those details require the loan’s terms and a separate scenario analysis.

Is the calculator result the amount a lender will quote?
No. It is an estimate from the inputs and formula shown. A lender’s disclosure may include different payment timing, fees, insurance, escrow, or other terms.

This result is an estimate for educational use, and the lender’s disclosure gives the exact figures.

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in p | Loan amount | $ | 200000 | 1 | 100000000
in apr | Interest rate (APR) | % | 6.5 | 0.01 | 100
in yrs | Loan term | years | 30 | 0.0833 | 50
out pmt | Monthly principal-and-interest payment | $ | round(p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)), 2) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2