Enter loan offers
Example data table
| Offer | Amount | APR | Term | Frequency | Orig. % | Points % | Closing | Extra |
|---|---|---|---|---|---|---|---|---|
| Loan A | $200,000 | 6.50% | 30 years | Monthly | 1.00% | 0.00% | $2,500 | $0 |
| Loan B | $200,000 | 6.25% | 30 years | Monthly | 0.50% | 0.75% | $2,000 | $0 |
| Loan C | $200,000 | 6.75% | 15 years | Monthly | 0.00% | 0.00% | $1,500 | $100 |
Formula used
Principal = Payment − Interest
New Balance = Balance − Principal − Extra
How to use this calculator
- Enable at least two loan offers you want to compare.
- Enter each loan’s amount, APR, term, and payment frequency.
- Add upfront fees like origination, points, and closing costs.
- Optional: add an extra payment to accelerate payoff.
- Click Compare Loan Costs to see results above.
- Use CSV or PDF buttons to export summaries and schedules.
Professional notes
Payment size and budgeting
Base payment is driven by APR, term length, and payment frequency. A 30-year schedule spreads principal across more periods, lowering each payment but raising lifetime interest. With $200,000 at 6.50% for 30 years monthly, principal-and-interest is about $1,264.14; at 6.25% it is about $1,231.43. Taxes and insurance are not included, so keep a separate housing or debt buffer.
Upfront fees and proceeds
Origination fees, discount points, and closing costs change what you effectively receive. The calculator treats these as upfront costs that reduce net proceeds. In the example table, Loan A has $4,500 fees (1.00% plus $2,500). Loan B also totals $4,500 (0.50% origination, 0.75% points, and $2,000 closing), showing how different fee mixes can look similar.
Interest and payoff timeline
Interest each period equals the current balance times the periodic rate, so early payments are interest-heavy. Extra payments attack principal directly, shrinking the balance used for future interest. Even $100 extra per period can cut payoff periods materially and reduce total interest, especially on long terms where compounding runs longer. Shorter terms raise payments but compress interest exposure. In the example, $200,000 at 6.75% for 15 years monthly is about $1,769.82, yet the loan finishes sooner, typically lowering total interest even before extra payments materially.
Effective APR as a benchmark
Nominal APR ignores fee timing. Effective APR estimates the annualized internal rate of return using net proceeds at time zero and all scheduled payments thereafter. With $4,500 upfront costs on $200,000, a 6.50% offer rises to roughly 6.931% effective APR in this model. This makes fee-heavy offers easier to compare on one scale.
Choosing the best offer
Start with total cost to see which offer is cheapest over the full payoff path. Next, check base payment to confirm affordability under your budget. If you expect to refinance or sell early, focus on the first 24–60 periods: compare interest paid, balance remaining, and fee recovery by rerunning offers with your expected holding period assumptions.
FAQs
1) What does “total cost” mean here?
Total cost equals all scheduled payments made plus upfront fees you entered. It includes principal, interest, and fees. It does not include taxes, insurance, or maintenance costs that may exist outside the loan.
2) How is effective APR different from APR?
APR is the stated annual rate used to compute interest. Effective APR estimates the annualized rate implied by receiving net proceeds upfront and repaying the scheduled payments over time, so fees and timing are reflected.
3) Should I include property taxes or insurance?
No. This tool focuses on loan mechanics: principal, interest, fees, and payoff timeline. Add taxes and insurance separately when building a full monthly budget, because they vary by location, lender, and coverage choices.
4) What happens when I add an extra payment?
The extra amount is applied each period after the scheduled principal-and-interest payment. It reduces the balance faster, shortens the number of periods, and typically lowers total interest. Results update automatically in totals and charts.
5) My lender charges fees out-of-pocket, not deducted. What should I do?
Enter the fees anyway to compare total cost across offers. If you paid fees out-of-pocket, net proceeds will be higher than shown, but the effective APR and total cost comparison remain useful for ranking options.
6) How can I compare loans if I plan to repay early?
Focus on early-period outcomes. Compare interest paid and remaining balance after your expected holding period, such as 24, 36, or 60 payments. You can approximate by reviewing the amortization preview and exporting the full schedule.