📖 Overview
Use this upgraded calculator to compare lender offers by monthly payment difference and savings potential.
🧪 Example Scenarios
Use these default and higher-pressure example inputs to explore how sensitive this calculator is before using your real numbers.
| Input | Base Case | Higher Pressure Case |
|---|---|---|
| Loan Amount ($) | 32,000 | 36,800 |
| Current Rate (%) | 8.2 | 9.84 |
| Offer Rate (%) | 6.9 | 8.28 |
| Loan Term (years) | 5 | 5.75 |
⚙️ How It Works
This compares monthly payment at current and new rates for the same principal and term.
The Formula
M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1] (calculated at each rate)
💡Rate shopping is most impactful on large loans and long terms. On a $300k 30-year mortgage, a 1.5% rate drop saves over $300/month — more than $109,000 over the life of the loan.
Quick Reference
| Loan / Term | 5% → 4% | 7% → 6% | 8% → 6.5% |
|---|---|---|---|
| $100k / 10yr | $1,061 → $1,012 (−$49) | $1,161 → $1,110 (−$51) | $1,213 → $1,108 (−$105) |
| $200k / 20yr | $1,320 → $1,212 (−$108) | $1,551 → $1,433 (−$118) | $1,672 → $1,509 (−$163) |
| $300k / 30yr | $1,610 → $1,432 (−$178) | $1,996 → $1,799 (−$197) | $2,201 → $1,896 (−$305) |
When To Use This
- Use this tool when you need a fast decision during active planning or execution.
- Use this before committing money, time, or tradeoffs that are hard to reverse.
- Use this to compare options using the same assumptions across scenarios.
Edge Cases To Watch
- Results can be misleading if key inputs are missing, stale, or unrealistic.
- Very small or very large values may amplify rounding effects and interpretation risk.
- If assumptions change mid-decision, recalculate before acting.
Practical Tips
💡 Use this before rate lock decisions.
💡 Test downside and upside rate bands.
💡 Run a best-case, base-case, and worst-case scenario before deciding.
💡 Use recent real values, not ideal assumptions, for better accuracy.
Frequently Asked Questions
❓ Does term length matter?
Yes, longer terms amplify rate impact on total cost.
❓ Can small rate drops matter?
Yes, even modest rate reductions can materially change payment.