Mortgage Comparison
Compare different mortgage offers & interest rates. See how rates affect monthly payments & total interest paid. Save thousands by choosing the right mortgage.
Loan Option A
Loan Option B
About Mortgage Comparison
Free Online Tool
Mortgage Comparison
Enter the loan amount, interest rate, and term for two mortgage options — compare monthly payments, total interest over the loan life, and cumulative equity growth to identify which mortgage structure saves the most money over your ownership horizon.
How to Use This Tool (30 Seconds)
- 1Enter Mortgage Loan Amount: Input the principal — home purchase price minus down payment — for both mortgage options. If comparing a 15-year against a 30-year mortgage on the same property, enter the same loan amount for both. If comparing different properties or refinancing scenarios, enter the respective principal for each.
- 2Enter Annual Mortgage Interest Rate: Input the fixed annual interest rate for each mortgage. Use rates quoted by your lender for the specific term — 15-year rates are typically 0.5–0.75% lower than 30-year rates for the same borrower. Check Freddie Mac's weekly Primary Mortgage Market Survey for current national averages.
- 3Enter Mortgage Term in Years: Input the loan duration — most commonly 15 or 30 years for fixed-rate mortgages. The tool supports any term from 5 to 30 years. Comparing a 20-year against a 30-year term on the same loan amount and rate is a particularly revealing comparison for refinancing decisions.
- 4Read the Mortgage Comparison: The tool calculates monthly payment, total interest over the full term, total repayment amount, and interest as a percentage of loan amount — showing the full lifetime cost difference between both mortgage structures.
Mortgage Amortization Formula and the 15 vs 30-Year Math
Mortgage payments are calculated using the standard fixed-rate amortization formula — identical to the one mandated by the Consumer Financial Protection Bureau (CFPB) for Loan Estimate disclosures:
// Monthly mortgage payment
r = annualRate ÷ 100 ÷ 12 (monthly rate)
n = termYears × 12 (total payments)
M = P × r × (1+r)^n ÷ ((1+r)^n − 1)
// Total mortgage cost and interest
totalPaid = M × n
totalInterest = totalPaid − P
// Interest burden ratio
interestBurden (%) = (totalInterest ÷ P) × 100
// 15yr vs 30yr comparison: $350,000 at 6.5% vs 7.0%
15yr @ 6.5%: M = $3,051 | totalInterest = $199,180 | burden = 57%
30yr @ 7.0%: M = $2,329 | totalInterest = $488,280 | burden = 139%
30yr costs $289,100 MORE in interest despite $722 lower monthly payment
The interest burden ratio exposes the true cost of term extension. A 30-year mortgage at 7% on a $350,000 loan has an interest burden of 139% — you pay 2.39× the original loan in total. The 15-year mortgage at 6.5% has a burden of 57% — you pay 1.57×. The 30-year mortgage costs $289,100 more in total interest in exchange for $722 lower monthly payments — meaning each monthly dollar of payment relief costs $33.45 in lifetime interest across the loan.
15-Year vs 30-Year Mortgage — Side-by-Side Reference
| Loan Amount | 15yr @ 6.5% Payment | 30yr @ 7.0% Payment | Interest Saved (15yr) |
|---|---|---|---|
| $150,000 | $1,308 | $998 | $124,000 |
| $250,000 | $2,178 | $1,663 | $206,000 |
| $350,000 | $3,051 | $2,329 | $289,000 |
| $450,000 | $3,922 | $2,994 | $371,000 |
| $600,000 | $5,229 | $3,992 | $495,000 |
Payments calculated using standard amortization formula. 15-year rate set at 6.5%, 30-year at 7.0% — reflecting the typical 0.5% rate premium on longer terms as of 2024 Freddie Mac survey data. Interest saved figures are approximate and rounded.
⚡ Pro Tip
If a 15-year mortgage payment is too high but you want to reduce total interest, take the 30-year mortgage and make one extra principal payment per year equal to one-twelfth of your monthly payment — effectively making 13 payments annually. On a $350,000 / 30-year / 7% mortgage, this single behavioral change reduces the loan term by approximately 4–5 years and saves $60,000–$80,000 in total interest without locking you into the higher mandatory payment of a 15-year term. If cash flow tightens, you revert to 12 payments — flexibility a 15-year mortgage cannot offer.
Disclaimer: This tool is for informational purposes only and does not constitute mortgage or financial advice. Calculations exclude property taxes, homeowner's insurance, PMI, HOA fees, and closing costs which materially affect the true monthly cost of homeownership. Actual mortgage terms depend on credit score, debt-to-income ratio, property type, and lender criteria. Consult a licensed mortgage professional before making mortgage decisions.
Frequently Asked Questions
Q: What loan amount should I enter — the home price or the mortgage principal?
Enter the mortgage principal — home price minus your down payment. A $400,000 home with a $80,000 down payment has a $320,000 mortgage principal. The down payment is already paid and does not form part of the amortizing loan. Entering the full home price overstates monthly payments and total interest by the down payment's contribution.
Q: Why are 15-year mortgage rates lower than 30-year rates?
Lenders face less interest rate risk on shorter-term loans — they are exposed to rate fluctuation for 15 years versus 30. Shorter terms also have lower default risk statistically. This lower risk is passed to borrowers as a rate discount — typically 0.5–0.75% below 30-year rates. This rate advantage compounds the 15-year mortgage's interest savings on top of the shorter term benefit.
Q: Is refinancing worth it if I can lower my rate by 1%?
Use the breakeven rule: divide total refinancing costs (typically $3,000–$6,000 in closing costs) by your monthly payment reduction. If costs are $4,000 and monthly saving is $200, the breakeven is 20 months. If you plan to stay in the home longer than 20 months, refinancing is financially justified. A 1% rate reduction on a $300,000 mortgage saves approximately $180–$200 per month — a breakeven of roughly 20–28 months at typical closing costs.
Q: What is the impact of a 0.5% rate difference on a 30-year mortgage?
On a $300,000 mortgage, a 0.5% rate increase from 6.5% to 7.0% raises monthly payment by $100 and increases total interest paid by approximately $36,000 over 30 years. This is why locking a rate before a Federal Reserve rate announcement can save tens of thousands of dollars — a 0.5% difference that seems small monthly has enormous lifetime cost impact on 30-year mortgages.
Q: What debt-to-income ratio do lenders use for mortgage approval?
Most conventional lenders follow the CFPB's Qualified Mortgage standard — a maximum back-end debt-to-income ratio of 43%, meaning all monthly debt payments including the new mortgage cannot exceed 43% of gross monthly income. The mortgage payment itself should ideally stay below 28% of gross monthly income — the front-end ratio used by Fannie Mae and FHA underwriting guidelines.
Q: Should I choose the shorter term if I can afford the higher payment?
If the higher payment is sustainable at under 28% of gross monthly income and leaves adequate emergency fund contributions, the shorter term is almost always the financially superior choice. The interest savings from a 15-year over a 30-year mortgage on a $400,000 loan typically exceed $300,000 — equivalent to a second home purchase in many markets. The 15-year mortgage is one of the highest-return financial decisions available to the average homeowner.
Q: Can I compare a fixed-rate against an adjustable-rate mortgage?
This tool compares fixed-rate mortgages using a constant interest rate. For an adjustable-rate mortgage comparison, enter the initial fixed period rate as a conservative starting point. ARMs carry rate reset risk — your payment changes after the fixed period ends. For a 5/1 ARM, enter the rate for the 5-year fixed period and compare against a 30-year fixed to evaluate the payment difference during the period you are most certain about.
"Choosing the right mortgage is not just about the lowest monthly payment; it's about the lowest total cost over the duration of your home ownership."