Tools · Run the numbers
Loan Estimate comparator
Two Loan Estimates, side by side — which is actually cheaper once you weigh rate against closing costs, with every fee bucket decoded.
Two Loan Estimates rarely line up cleanly — one has the lower rate, the other the lower fees. This works out which is actually cheaper over the years you'll keep the loan, decodes every fee bucket, and shows where you can push back.
For a fair comparison, both Loan Estimates should be for the same loan amount, loan type, and term — otherwise you're not comparing apples to apples. Try to get them on the same day, since rates move daily. And check each one's rate-lock period: it should run through your expected closing date, and a longer lock can cost a bit more, so compare similar lock lengths. Pick the loan type both quotes share — comparing across types (say, an FHA quote against a conventional one) is a different decision, because the mortgage-insurance rules differ. And match the rate structure: an ARM quote against a fixed quote is — like FHA against conventional — a different decision (rate risk, not lender pricing), so pick the structure both quotes share, and for ARMs the same fixed period.
Optional — most people sell or refinance long before the term ends. We default to 5 years, the figure the Loan Estimate itself uses.
The verdict
Over 5 years, Lender B costs $3,367 less.
Lender A: $117,426 Lender B: $114,059 over 5 years
total paid in P&I, mortgage insurance, and loan costs, minus principal paid off
Lender B is $59/mo lower on payment (P&I + mortgage insurance).
Lender A is $1,150 lower in upfront loan costs (A–C minus credits).
Break-even ~ month 20 (1 yr 8 mo). Keep the loan past that and Lender B wins; sell or refinance sooner and Lender A does.
The APRs point the same way — Lender B is lower there too.
| Metric | Lender A | Lender B |
|---|---|---|
| Interest rate | 6.5% | 6.25% |
| APR | 6.65% | 6.4% |
| Monthly P&I | $2,275 | $2,217 |
| Monthly mortgage insurance (PMI) | $0 | $0 |
| Monthly payment (P&I + MI) | $2,275 | $2,217 |
| A. Origination | $1,200 | $2,400 |
| B. Can't shop for | $900 | $950 |
| C. Can shop for | $1,800 | $1,700 |
| Lender credits | $0 | $0 |
| Total loan costs after credits | $3,900 | $5,050 |
| Lender-controlled costs (A + B − credits) | $2,100 | $3,350 |
| 5-year cost of borrowing | $117,426 | $114,059 |
How the verdict is computed: the same way the Loan Estimate's own “In 5 Years” comparison works (page 3 of every LE) — everything you'd pay in principal & interest, mortgage insurance, and loan costs A–C (minus lender credits), minus the principal you'd have paid off — run at your horizon instead of a fixed five years. Monthly mortgage insurance is held level through the horizon. Taxes, prepaids, escrow, and the LE's “Other” section H — things like owner's title or your agent's compensation — are left out because they're about the same no matter which lender you choose and they're your own money — for your total cash at closing, use the Cash-to-close calculator.
Fee decoder
What each Loan Estimate bucket actually is — and which ones you can move.
The lender's own money — points, underwriting, processing, application, doc prep. This is where padding hides; big gaps between lenders are markup, so push back.
Appraisal, credit, flood — the lender picks the provider, so these should land similar lender to lender. Heads-up: some items in B and C — appraisal, credit report, pest inspection, title work — don't count toward APR under federal rules. That's why our APR check works as a range, not an exact match.
Title, settlement, survey, pest — get your own quotes. The biggest controllable savings after origination. Estimates here carry the weakest protection on the form — up to a 10% aggregate increase if you use the lender's list, no cap at all if you choose your own provider — which is why regulator guidance focuses lender comparisons on A, B, and credits.
Money toward your closing costs, usually for a slightly higher rate. It lowers your cash to close.
Required with less than 20% down. You can ask to remove it at 80% of the original value, and it ends automatically at 78% — and it can differ by the lender's MI provider, so it's fair game to compare.
Estimates only — not a quote, pre-approval, or offer of credit. Your actual terms come from a lender's Loan Estimate. It's only as accurate as the numbers you enter, and the APR comparison only holds if both quotes are the same loan amount, term, and type.
Terms on this page
- Loan Estimate (LE)A standardized form showing your loan's rate, payment, and costs; you get it within three business days of applying, built for comparing lenders.
- Annual percentage rate (APR)The yearly cost of the loan including the rate plus most fees, so it usually runs a bit higher than the rate; handy for comparing lenders.
- Adjustable-rate mortgage (ARM)A loan whose rate can change after an initial fixed period, so your payment can rise or fall over time.
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