Real Estate
How to compare mortgage offers
Put mortgage offers on the same basis and compare more than the headline monthly payment.
Compare the same principal, down payment and—where possible—term. Collect the contractual rate, official CAT, base and all-in payment, insurance, fees, appraisal, closing cash, total repayment and prepayment rules.
For $2,000,000, two offers can look like this:
| Item | Offer A | Offer B |
|---|---|---|
| Annual rate | 8.5% | 9.0% |
| Term | 15 years | 20 years |
| Base payment | $19,694.79 | $17,994.52 |
| Total payments | $3,545,062.41 | $4,318,684.59 |
| Interest | $1,545,062.41 | $2,318,684.59 |
Offer B has the smaller payment but much higher lifetime interest because the term is longer. Fees and insurance may change the comparison again.
Use the mortgage calculator to isolate rate and term, then rely on each institution’s formal schedule and disclosures before signing.