What to compare
The lowest payment and the lowest total cost are often different loans. A 15-year loan has a higher payment but far less interest; an ARM starts lower but can rise; an FHA loan needs less down but adds mortgage insurance. The table marks the cheapest loan on each measure, so you can see the trade-off at a glance.
How the comparison works
Each column is a complete loan with the same form as the mortgage calculator: loan type (fixed, ARM, interest-only or balloon), program (conventional, FHA, VA or USDA), price, down payment, rate, term, payment frequency, taxes, insurance and extra payments. Every loan runs through the same schedule engine, so fees and mortgage insurance are counted the same way. Use Copy on a loan to start a new column from it, then change one thing, such as the term or the down payment, so the difference in the table comes from that one choice.
The table shows, for each loan:
- First payment, including tax, insurance and any mortgage insurance you entered, and the highest principal and interest the loan can reach, which matters for ARMs and interest-only loans.
- Interest, insurance and fees (including FHA, VA or USDA upfront fees) over the period you choose, what you'd still owe at the end of it, and totals over the whole loan.
Paid in the first years isn't marked as a winner: much of it on a shorter loan is principal, which comes back to you as equity. Interest, insurance and fees is the fairer measure.
Compare over the years you'll keep it
Few people keep a mortgage for 30 years. If you expect to move or refinance within, say, seven years, what matters is what you'll pay in those years and how much you'll still owe at the end of them. Set that period above the table: 3, 5, 7, 10 or 15 years.
Example: 30 years or 15 years
The two loans the page opens with are both for a $400,000 home with $80,000 down, so each borrows $320,000. Loan A is 30 years at 6.5%, and Loan B is 15 years at 5.75%. The rates are examples.
- Payment, principal and interest: $2,022.62 for A, $2,657.31 for B, about $635 more a month.
- Interest in the first 7 years: about $139,200 for A and $107,300 for B. After 7 years A still owes about $289,300 and B about $204,100.
- Interest over the whole loan: about $408,100 for A and $158,300 for B.
B costs less on every measure except the monthly payment. The question is whether that payment fits your budget comfortably, which the affordability calculator can help you check. Extra payments on Loan A are a middle path.
Example: conventional with PMI or FHA
Same $400,000 home at 6.5% for 30 years, with $20,000 (5%) down. The conventional loan has PMI at 0.5% of the loan a year; the FHA loan adds the 1.75% upfront premium to the loan and charges HUD's annual premium.
- Conventional: a $380,000 loan and a first payment of $2,560.19, including $158.33 of PMI. PMI ends after payment 135, when the balance is scheduled to reach 78% of the price, and comes to about $21,400 in all.
- FHA: $6,650 of upfront premium makes the loan $386,650, and the first payment is $2,601.42. With less than 10% down, the annual premium lasts for the life of the loan, about $37,300 in all.
- Interest, insurance and fees in the first 7 years: about $178,600 conventional and $187,600 FHA.
At these inputs the conventional loan is cheaper, but the result turns on the PMI rate, which depends on your credit and down payment, and on whether you qualify for each program at the same rate. The FHA loan calculator explains how HUD's premiums work.
Example: a 5/6 ARM or a fixed rate
A 5/6 ARM starting at 6%, with 2/1/5 caps, set to move to 7% after five years, against the 30-year fixed loan at 6.5%, both $320,000. The ARM's payment starts at $1,918.56, about $104 less, and rises to $2,104.61 once it reaches 7%. Over 5 years its interest is about $92,900 against $100,900 for the fixed loan; over 7 years it's about $134,000 against $139,200. If the rate instead rises as fast as the caps allow, the payment can reach $2,904.21, and 7 years of interest comes to about $148,800, more than the fixed loan. The ARM calculator shows each adjustment.
Things to check
- Use the same home and inputs. Enter the same price, tax and insurance in each loan, or the difference in the table isn't only the loan.
- Use real quotes. Rates, points and fees differ by lender and by your credit. Each lender's Loan Estimate, due within three business days of your application, has the figures to enter.
Share a comparison
The address in your browser holds every loan's numbers, after the #, which browsers never send to
a website. Copy it to send the whole comparison to someone, or bookmark it to come back to.
Common questions
Is a 15-year mortgage better than a 30-year one?
It costs far less interest, as the example shows, but the payment is higher. It suits you if that payment fits with room to spare. A 30-year loan with extra payments keeps the lower required payment as a fallback.
Does the comparison include closing costs?
It includes each program's upfront fee (FHA, VA or USDA), whether paid in cash or added to the loan. Lender fees, points and other closing costs aren't included, so compare those from each Loan Estimate.
Is an ARM cheaper than a fixed rate?
It can be at first, when its starting rate is lower. After the fixed period it depends on where rates go. Compare the expected and worst cases over the years you'll keep the loan.
Can I compare FHA, VA and USDA loans?
Yes. Pick the program in each loan. VA and USDA loans have their own eligibility rules, explained on the VA and USDA calculator pages.
Can I compare my current loan with a refinance?
Use the refinance calculator for that. It starts from what you owe today and counts closing costs and the break-even month.