Mortgage Rate Impact Calculator
Compare two mortgage interest rates to see the difference in monthly payment and total interest paid over the life of the loan.
A quarter of a point sounds like nothing when a loan officer says it out loud. Over thirty years on a real balance it is a car. This puts two rates side by side and shows you the monthly difference and the lifetime one.
Standard mortgage payment formula: M = P × r(1 + r)ⁿ / ((1 + r)ⁿ − 1)
Where:
- M = monthly payment
- P = loan balance (principal)
- r = monthly interest rate (annual rate ÷ 12)
- n = number of monthly payments (years × 12)
Worked example
Balance $200,000, 20 years remaining.
At 2.5%: r = 0.025 ÷ 12 = 0.0020833, n = 240 M = $200,000 × 0.0020833 × (1.0020833)²⁴⁰ ÷ ((1.0020833)²⁴⁰ − 1) (1.0020833)²⁴⁰ = 1.6479, so M = $1,059.81/month
At 5.0%: r = 0.0041667 (1.0041667)²⁴⁰ = 2.7132, so M = $1,319.91/month
Monthly difference: $260.11. Over the full 240 payments that is $62,425, on the same $200,000 of borrowing.
Why the gap is so much larger than it looks
Doubling the rate from 2.5% to 5.0% does not double the payment, because a large part of every payment is principal you owe regardless. It raises this one by about 25%. But the interest portion roughly triples, and interest is the only part you never get back. That is why comparing total cost matters more than comparing the monthly figure.
The effect is also strongly term-dependent. On a 30-year loan the same two rates diverge much further than on a 15-year one, because there is more time for the rate to act on the balance. If you are weighing a rate against a term, run both here.
When this question comes up
- A fixed-rate period ending and the loan reverting to the lender’s variable rate
- Two competing quotes where one lender wants points and the other does not
- Deciding whether to lock a rate now or float and hope
- An adjustable-rate mortgage approaching its first reset
One thing this does not include
These are principal and interest only. Property tax, homeowners insurance, and mortgage insurance sit on top and do not change with the rate, so the difference shown here is the whole of what a rate change costs you. Compare on APR (Annual Percentage Rate) rather than the headline rate when the two offers carry different fees.
How we build and check this calculator
This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
SuperGlobalCalculator is independently built and maintained. See how we build and verify our calculators.