This **mortgage comparison calculator** allows you to compare between as many loan plans as you want by specifying the desired amount, term and mortgage interest rate. Below the form there is in depth information on how to do the right choice for your family.

## How does this mortgage comparison calculator work?

This is a very flexible calculation tool that allows users analyze 2 or more mortgage offers by considering the amount to be borrowed, term of the loan and the fixed interest rate. In order to add as many offers as you may need you just have to press the +1ADD button.

The algorithm of this *mortgage comparison calculator* uses the standard loan formulas as they are presented within this section:

- Monthly payment value

P = L[r(1 + r)^{n}]/[(1 + r)^{n} - 1]

- Total paid per year

PY = P*12

- Total interest paid

IP = (P*T*12) – L

- Total paid

TP = P*T*12

- No. of payments

NP = T*12

Where:

P = Monthly payment

L = Loan amount

r = Annual interest rate/1200

T = Loan term

n = Loan term *12

PY = Total paid per year

IP = Total interest paid

TP = Total paid

NP = No. of payments

Within the information it displays the user may find all the relevent data to make the right decision, such as: total cost and total paid on interest, monthly payment owed and total number of payments to be made.

## How to compare between 2 or more loan offers …

- Try to use similar value for the amount borrowed otherwise you may not get the right or real figures which offer best suits your needs. To do this take as reference the lowest amount you are allowed to borrow from a specific lender and compare it with the conditions from the other creditors.
- Compare between similar time periods to repay otherwise your analysis may not be relevant.
- Try to do the comparison of the interest you will have to pay by taking account of the annual percentage rate (APR) not in the nominal annual interest percent as it appears in the offer. To do so you have to ensure that the interest rates you are about to compare are compounding with the same frequency. To do so check with them which are they compounding rule and convert all the rates into annually rule.
- Please note in case you choose different terms to repay the mortgages you analyze, you have to look not only on the monthly regular payment level, but rather on the forecast of the total paid and more on the total paid on interest as they will show you more relevant info on how the plan is. While the monthly payment may be significant lower than in case of a loan with a shorter repayment term, you may discover that in case of a longer term mortgage you will pay a significant higher amount on interest.
- Apart from the variables taken into account by this mortgage comparison calculator you may also need to check which are the closing costs associated with each plan. Usually closing costs vary from 3 to 5% from the loan amount borrowed.

## Example of a result

For instance let’s compare 3 loan plans with the following characteristics:

Loan 1:

- Amount $200,000

- Annual interest rate 3.45%

- Term: 25 years

Loan 2:

- Amount $200,000

- Annual interest rate 3.38%

- Term: 26 years

Loan 2:

- Amount $200,000

- Annual interest rate 3.25%

- Term: 27 years

Loan details | Monthly payment | Total paid per year | Total interest paid | Total paid | No. of payments |
---|---|---|---|---|---|

Loan 1 | $995.89 | $11,950.70 | $98,767.60 | $298,767.60 | 300 |

Loan 2 | $964.27 | $11,571.27 | $100,852.92 | $300,852.92 | 312 |

Loan 3 | $928.01 | $11,136.14 | $100,675.71 | $300,675.71 | 324 |

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