βοΈ Loan Comparison Calculator
Two loans side by side: payment, interest, and total cost.
Cheaper loan overall
Estimates for planning only, not financial advice.
Two loan offers never differ in just one way, so comparing them takes all three numbers at once: the monthly payment, the total interest, and the total cost. Put a $300,000 loan at 6.5 percent for 30 years against 6.0 percent for 15 years. Loan A costs $1,896 a month and $382,633 in interest. Loan B costs $2,532 a month but only $155,683 in interest, saving $226,951 overall. This calculator runs that side-by-side math for any two offers.
The comparison exposes the central tradeoff in borrowing: monthly comfort versus lifetime cost. Lenders advertise the payment because it sells; the total interest is where your wealth actually goes. Seeing both numbers together is the antidote to payment-only thinking.
How to Use This Calculator
Enter one loan amount both offers share, then each loan's rate and term. The calculator shows each payment, each total interest figure, the monthly difference, and which loan costs less overall.
Enter the loan amount. Use the same amount for both so the comparison is apples to apples.
Enter Loan A's rate and term, then Loan B's rate and term, from the actual offers.
Read which loan saves money overall and by how much. For the fee-inclusive version of this comparison, our APR calculator folds lender fees into the rate.
The Math
Each loan gets the standard amortization formula, then the totals are differenced. Nothing exotic, which is the point: honest comparison needs no exotic math, just all three outputs where you can see them. The monthly payment difference deserves its own line because it is the cash-flow reality you live with while the total interest is the wealth reality you retire with.
Reading the Tradeoff
| Loan A: 6.5%, 30 yrs | Loan B: 6.0%, 15 yrs | |
|---|---|---|
| Monthly payment | $1,896 | $2,532 |
| Total interest | $382,633 | $155,682 |
| Total cost | $682,633 | $455,682 |
Loan B saves $226,951 but demands $636 more every month for 15 years. If that payment strains the budget, the "cheaper" loan can cause the missed payments that wreck credit. Affordability first, then optimization: the best loan is the cheapest one whose payment you can make in a bad year, not just a good one. Our home affordability calculator keeps the payment anchored to income.
Worked Example
With the defaults: $300,000 at 6.5 percent for 30 years (360 payments) gives a monthly payment of $1,896.20. Total paid is $682,633, so total interest is $382,633. At 6.0 percent for 15 years (180 payments) the payment is $2,531.57, total paid $455,683, total interest $155,683. Loan B is cheaper overall by $226,951, while Loan A's payment is $635.37 lower each month.
Beyond the Numbers
Three things the math misses. First, flexibility has value: the 30-year loan's lower required payment lets you invest the difference or survive income shocks, and disciplined extra payments can mimic the 15-year result. Second, inflation quietly subsidizes long fixed-rate debt by repaying in cheaper dollars. Third, fees and points can flip a close comparison, so add them before deciding.
My rule: if the payment difference would go to investments you will actually make, take the longer loan and invest the gap. If it would go to lifestyle, take the shorter loan and let the structure enforce the savings. Be honest about which person you are.
Beyond the Monthly Payment
The monthly payment is the least informative number in a loan comparison because lenders can shrink it by stretching the term while total cost balloons. Compare total interest first, then the APR, which bakes fees into the rate, and only then the payment. A loan with a lower payment but $40,000 more lifetime interest is not cheaper; it is just slower.
Watch the fee games: origination points buy down the rate, so a "lower rate" with two points can cost more than a higher rate with none unless you keep the loan past the break-even, usually five to seven years. Adjustable-rate offers deserve a comparison at the fully indexed rate, not the teaser. And check prepayment penalties, because the cheapest loan on paper can become the most expensive if it traps you. For refinancing math specifically, our refinance break-even calculator finds the payoff point.
The 15-Year Versus 30-Year Question
The most common loan comparison is term length. A 15-year mortgage at a lower rate builds equity dramatically faster: on a $300,000 loan, the 15-year borrower owes roughly $100,000 less after ten years than the 30-year borrower. Total interest often differs by more than $150,000.
The 30-year loan's case is flexibility: the lower required payment lets you invest the difference, survive income shocks, and prepay voluntarily. Disciplined borrowers can mimic a 15-year loan with extra payments while keeping the safety valve. Undisciplined ones just spend the difference. Know which borrower you are before choosing.
Estimates for planning only, not financial advice.Frequently Asked Questions
How do I compare two loan offers?
Line up the same loan amount at each offer's rate and term, then compare monthly payment, total interest, and total cost. A lower rate is not automatically cheaper if the term is longer. This calculator puts both offers side by side so the tradeoff between monthly payment and total interest is explicit.
Is a 15-year loan always better than a 30-year loan?
On total interest, almost always: the shorter term at a lower rate saves a fortune. On monthly cash flow, the 30-year wins with a much smaller payment. The right choice depends on whether you value total cost or monthly flexibility more, and whether you will actually invest the payment difference.
Should I compare APR or interest rate?
Compare APR when fees differ between lenders, because APR folds fees into the rate. When this calculator compares two rate-and-term structures, use the note rates for the payment math, then check each offer's APR separately to catch fee differences. Our APR calculator handles the fee side.
What is the total cost of a loan?
Principal plus all interest paid over the life of the loan, plus any fees. A $300,000 loan at 6.5 percent for 30 years costs $682,633 total: $300,000 of principal and $382,633 of interest. The interest exceeds the amount borrowed, which surprises first-time borrowers every time.
How much does half a point of rate save?
On a $300,000 30-year loan, dropping from 7.0 to 6.5 percent saves about $100 a month and roughly $36,000 in total interest. Small rate differences compound enormously over long terms, which is why shopping lenders is one of the highest-paid hours in personal finance.
Does making extra payments change the comparison?
Yes, extra payments shorten the effective term and cut total interest on either loan, narrowing the gap between them. A 30-year loan with disciplined extra payments can approach the total cost of a 15-year loan while keeping the lower required payment as a safety net.
Should fees be included in a loan comparison?
Absolutely. Two loans at the same rate and term can differ by thousands in origination fees, points, and closing costs. Add each offer's fees to its total interest for the honest comparison, or compare APRs, which do this automatically.
What about adjustable-rate versus fixed-rate loans?
Compare the fixed rate against the ARM's initial rate plus its worst-case adjusted payments, not just the teaser rate. An ARM at 5.5 percent that can adjust to 8.5 percent is a different product than a fixed 6.5 percent loan, and the comparison should price the risk, not just the first year.
How do I compare loans with different amounts?
Scale to the same amount or compare cost per thousand borrowed. This calculator uses one amount for both loans to keep the comparison clean; if offers differ in amount, run each amount separately and compare total cost directly.
When does refinancing show up in this comparison?
Put your current loan as Loan A and the refinance offer as Loan B, then subtract refinance closing costs from the savings. If Loan B saves $200 a month but costs $6,000 to close, the break-even is 30 months. Our refinance break-even calculator does that math precisely.