Mortgage Calculator Compare Interest Rates

Interest Rate Comparison:

\[ Diff = Interest1 - Interest2 \]

First Interest Rate:

Second Interest Rate:

Loan Amount:

Loan Term:

years

Interest Rate Difference:

Monthly Payment (Rate 1):

Monthly Payment (Rate 2):

Monthly Payment Difference:

Total Difference Over Loan Term:

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From:	To:

1. What is Interest Rate Comparison?

Comparing mortgage interest rates helps borrowers understand the financial impact of different rate options. Even small differences in rates can lead to significant savings over the life of a loan.

2. How Does the Calculator Work?

The calculator uses the following formulas:

\[ Diff = Interest1 - Interest2 \] \[ Monthly\ Payment = \frac{Loan\ Amount \times Monthly\ Interest\ Rate \times (1 + Monthly\ Interest\ Rate)^{Number\ of\ Payments}}{(1 + Monthly\ Interest\ Rate)^{Number\ of\ Payments} - 1} \]

Where:

$ Interest1 $ — First interest rate (%)
$ Interest2 $ — Second interest rate (%)
$ Loan\ Amount $ — Total amount borrowed ($)
$ Monthly\ Interest\ Rate $ — Annual rate divided by 12
$ Number\ of\ Payments $ — Loan term in years multiplied by 12

3. Importance of Comparing Rates

Details: Comparing interest rates helps borrowers make informed decisions, potentially saving thousands of dollars over the life of a mortgage.

4. Using the Calculator

Tips: Enter two interest rates, loan amount, and loan term. The calculator will show the rate difference and its financial impact.

5. Frequently Asked Questions (FAQ)

Q1: How much difference does 0.25% make?
A: On a $300,000 30-year loan, 0.25% difference equals about $44/month or $15,840 over the loan term.

Q2: Should I always choose the lowest rate?
A: Consider other factors like fees, points, and loan features in addition to the interest rate.

Q3: How do I get the best interest rate?
A: Improve your credit score, lower your debt-to-income ratio, and shop around with multiple lenders.

Q4: Are fixed and variable rates comparable?
A: They serve different needs. Fixed rates provide stability while variable rates may start lower but can change.

Q5: How often do mortgage rates change?
A: Rates can change daily based on market conditions. Lock your rate when you find a good offer.