📖 Overview
Use this calculator to quantify potential monthly savings from rate improvements.
⚙️ 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) |
Practical Tips
💡 Use this before rate lock decisions.
💡 Test downside and upside rate bands.
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.