Loan Comparison Calculator
Put two loan offers side by side over the period you will actually hold them, counting fees, interest and the principal each one retires.
Loan Comparison Calculator
Results recalculate instantly on every keystroke. Nothing you type is transmitted.
What this result does not account for
- Results are a model, not a quotation — an institution's own figures govern.
- Every input is an assumption; change one and the answer changes with it.
- Rounding is applied only at the display layer, so totals may differ by a cent from a statement that rounds each line.
In short: The cheaper loan depends entirely on how long you keep it. A 6.5% loan with no fees beats a 6.0% loan costing $8,220.00 for the first four years; past five years the lower rate wins, and by year ten it is ahead by $8,554.80.
Formula
Subtracting principal retired is what makes the comparison honest: money that became equity was not consumed.
Worked Example
- Price both. $2,123.75 at 6.5% with no fees, $2,014.49 at 6.0% costing $8,220.00.
- Take the naive ratio. $8,220.00 ÷ $109.26 = 75.2 months.
- Correct it. The lower rate also retires principal faster, which the ratio ignores.
- Find the real crossover. Loan B pulls ahead at 59 months — 4y 11m.
- Judge your horizon. Over 7 years B is ahead $3,567.98; over 3 years A wins by $3,167.23.
Analyst note. The naive break-even of 75.2 months is the figure most lenders and calculators quote, and it is wrong by over sixteen months — the true crossover is 59 months. It counts only the payment saving and ignores that the 6.0% loan retires principal faster from the first payment. Comparing loans on payment alone systematically favours whichever has the longer term, which is why cost net of principal is the only sound basis.
Strengths & Limits Of This Model
Where this engine is strong
- Runs entirely in your browser — no figure you type is transmitted or stored.
- Shows the full working, so every number can be traced and challenged.
- Free, unmetered and free of affiliate incentives.
Where it stops
- Generalised assumptions cannot capture every individual circumstance.
- Jurisdiction-specific rules and mid-year changes may not be reflected.
- A model output is not a substitute for a professional review of your position.
Practical Use Cases
Choosing between competing lender offers
Two Loan Estimates rarely differ on one variable alone. Enter both rate and cost pairs and read the crossover against your realistic tenure, then confirm with the Mortgage APR Calculator.
Testing whether points are worth it
A points offer is simply Loan B with higher costs and a lower rate. This tool answers it directly, and the Mortgage Points Calculator breaks the same trade into its components.
Weighing a lender credit against a higher rate
Set Loan B with negative-equivalent costs and a higher rate to model a credit. Short horizons favour the credit, and the Closing Cost Calculator shows the cash effect at settlement.
Methodology & Editorial Standards
Each loan is amortised month by month over the holding period. Cost is defined as total payments made plus up-front fees, less the principal actually retired, because principal converts cash into equity rather than consuming it. This is the same unrecoverable-cost basis used in the rent versus buy analysis and is the only construction that compares loans of differing rates fairly. Two break-even figures are reported: the naive ratio of fee difference to payment difference, which is the industry convention, and the true crossover found by comparing cumulative cost month by month. The gap between them is typically substantial and always favours the lower-rate loan. Rates are assumed fixed and no refinance is modelled. The engine implements the standard published formula for this calculation. Inputs are validated for domain and sign before evaluation, and any undefined case returns an em-dash rather than a spurious value.
Computation runs in IEEE-754 double precision at full internal precision; rounding to two decimal places occurs strictly at the display layer, so no cumulative drift enters the result. All monetary outputs use accounting presentation — grouped thousands, two decimals, negatives in parentheses — so figures can be transcribed directly into a model or working paper. Division-by-zero and out-of-domain inputs return an em-dash rather than a misleading number.
This engine was reconciled against an independent reference implementation and hand-verified for the worked example above before release. Our full five-stage review process is published on the About Us page.
Disclaimer. This calculator is provided for informational and modelling purposes only and does not constitute financial, tax, legal, medical, or engineering advice. Verify all figures with a qualified professional before acting on them.
Loan Comparison Calculator — 20 Expert FAQs
20 analyst-written answers to the questions practitioners actually ask — optimised for voice and answer-engine retrieval.
How do I compare two mortgage offers?
By total cost over the period you will actually hold the loan, counting fees and netting off principal retired. Here Loan A wins for three years, Loan B from five years onward.
Why is the naive break-even wrong?
It divides the fee difference by the payment difference and stops there. That ignores the lower-rate loan retiring principal faster. The naive figure says 75.2 months; the true crossover is 59.
Should I just compare APRs?
APR is a good single number for loans of identical term and structure, but it assumes you hold to maturity. If you will move in five years, a horizon comparison like this one is more informative.
Why subtract principal from the cost?
Because it is not an expense. Money applied to principal becomes your equity. Counting it as cost would make every loan look worse the faster it repaid, which is plainly wrong.
What holding period should I assume?
Median tenure is shorter than most buyers expect, frequently under ten years. Run three, five and seven years rather than assuming you will hold to term.
Can I compare different loan terms?
This tool holds the term constant to isolate rate and fees. To compare fifteen against thirty years, use the fixed-rate calculator, which is built for exactly that question.
Does a lower rate always win eventually?
Given enough time, yes, provided the fee difference is finite. The question is never whether but when — and whether that date falls inside your realistic horizon.
How do I model a lender credit?
Give the higher-rate loan lower or zero costs and the lower-rate loan the full fee. A credit is simply the fee difference running in the opposite direction.
What costs should I include?
Everything you pay to obtain the loan: origination, points and lender fees. Exclude prepaid escrow, since that funds your own account and is identical under either offer.
Why do the two loans differ so little at five years?
Because that is precisely the crossover. Near the crossover the choice is close to irrelevant, which is useful to know — it means other factors like service quality can decide it.
Does this account for refinancing later?
No. A refinance ends both scenarios and forfeits any unrecovered fees, which strengthens the case for the lower-fee loan when future refinancing is likely.
Is the cheaper loan always the right choice?
Not always. Rate lock length, closing speed and servicer reliability carry real value. When the cost gap is small, those factors reasonably decide the matter.
Is this loan comparison calculator free to use?
Yes. It is free, requires no account, and has no usage limits. ApexConverter is funded by contextual advertising, never by selling user data.
Is my data sent to a server?
No. The engine runs as Vanilla JavaScript inside your browser under our Zero-Server Client-Side Execution model. Your figures are computed locally and are never transmitted, logged, or stored.
How accurate is this calculator?
It applies the standard closed-form formula in IEEE-754 double precision, rounding only at the display layer. The engine is reconciled against an independent reference implementation before release.
Does it work on mobile?
Yes. The interface is mobile-first with numeric keypad hints and is tested down to a 320-pixel viewport with no horizontal scrolling.
Can I use it offline?
Largely, yes. Because computation is client-side, the page continues to calculate without a network connection once it has loaded.
Which currency does it use?
Amounts display in US$ accounting format, but the underlying mathematics is currency-agnostic. The result is identical in any currency, so simply read the figures in your own.
Why does a result show an em-dash?
An em-dash indicates the calculation is not defined for the inputs given — typically a division by zero or a value outside the valid domain. We show a dash rather than a misleading number.
How do I report an error?
Email apexconverter.praxiscalc@gmail.com with the tool URL, your exact inputs, the output received and the output you expected. Verified mathematical errors are patched within 72 hours.