How is APR calculated?

APR is computed by finding the discount rate that makes the present value of all payments (including upfront fees and points) equal to the loan amount, then annualizing it.

What are mortgage points?

One point equals 1% of the loan amount paid upfront to reduce the interest rate. Paying points makes sense if you stay in the home long enough to reach the break-even month.

How is the break-even period calculated?

Break-even = extra upfront cost ÷ monthly payment savings. After this many months, the lower-rate mortgage becomes cheaper in total.

Does the tool account for taxes and insurance?

No. This tool computes principal and interest only. Add your estimated property taxes, homeowner's insurance, and PMI separately.

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Mortgage Comparison Tool

Compare 2–3 mortgage offers side-by-side including APR and break-even analysis.

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About this tool

Enter the details for up to three mortgage offers — loan amount, interest rate, term, points, and closing costs — and instantly see each loan's monthly payment, total amount paid, total interest, and true APR. A break-even analysis shows how many months it takes for a lower rate with higher points to pay off versus a higher rate with fewer points. The cheapest overall option receives a Recommended badge.

How to use

1 Enter the loan amount, annual interest rate, and loan term for Mortgage 1.
2 Fill in points (0–5) and closing costs.
3 Click Add Mortgage to add a second or third offer.
4 Click Compare to see monthly payments, total interest, APR, and break-even periods.
5 The badge highlights the cheapest mortgage over the full term.

Frequently Asked Questions

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