Mortgage comparison calculator

Finally, an easy way to compare two loans.

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A home loan comparison calculator allows you to compare different expense amounts, loan terms, interest rates and repayment frequencies so you can find the most suitable home loan for your current situation. If you are looking for a new home loan or are looking to better manage your current loan, the loan comparison calculator is a helpful tool to help you find the best deal.

This tool can show you whether your current situation is more suitable for a fixed rate instead of a variable, or vice versa. It also allows you to shop around with various lenders before you decide which loan to apply for.

To use the loan comparison calculator you’ll be asked to input the information for the two loans you're comparing. Using the tabs on the calculator you’ll be able to input the loan type, fixed or variable rates, fees, the loan term and the repayment frequency. The calculator works through a number of assumptions, so there's some wiggle room in the results.

How to use the home loan comparison calculator

The loan comparison calculator is user-friendly and gives you quick results. All you have to do is input the required information and you’ll get your comparisons of the two given loans.

When you are choosing from the possible scenarios you’ll be asked to input the general loan information. You’ll then enter in the specific information for the two loans you wish to compare. Once you put this information into the loan comparison calculator the results will tell you which loan will save you more money and how much each loan will cost.

Here's a breakdown of the information you’ll need to provide:

  • Loan amount. The loan amount is the amount of money you plan to borrow from your lender.
  • Loan term. This refers to how long you'll be taking the loan out for, with usual terms ranging from 25 - 30 years.
  • Upfront fees. Upfront fees are any fees that you’ll have to pay when you first open the loan, such as application fees or establishment fees.
  • Ongoing fees. Ongoing fees are fees that you’ll have to continually pay throughout the life of your loan. These can be annual fees, service fees, or account-keeping fees.
  • Introductory rates. Introductory rates are special rates that might be offered by your lender for a set period of time at the start of your loan. That time period is referred to as the introductory term.
  • Ongoing rates. Finally, ongoing rates are the agreed-upon interest rates that will take effect once your introductory term has ended.

Case study

Janet had been shopping around for a home loan for her soon-to-be new home. She had been looking at several loan offers from different lenders but is unsure which would give her the best deal. To help her decide she turned to a loan comparison calculator. All Janet had to do was enter in the requested information and let the loan comparison calculator do the work for her.

After she gathered all of the required information regarding the two loans she wanted to compare she opened up the loan comparison calculator and entered in the information.

Janet was looking for a $100,000 loan with a loan term of 20 years. The first loan had $400 in upfront fees, $10 in ongoing fees and an introductory rate of 5.75% p.a. that reverted to an ongoing rate of 7.25% p.a. after an introductory term of 24 months.

The second loan had $300 in upfront fees, $40 in ongoing fees and an introductory rate of 4.25% p.a. that reverted to an interest rate of 6.75% p.a. after 36 months. The calculator showed Janet that the second loan, while the ongoing fees were higher, would save her $5,370. Furthermore, the results told Janet that the initial payment for the first loan would be $712.08 while the payment for the second loan would only be $659.23.

The ongoing payment for the first loan would be $793.22 while the second loan’s ongoing payment would be $781.49. Finally, the loan comparison calculator told Janet that the first loan would cost her $188,826 in total and the second would only cost $183,456. With the tool’s help Janet sees that the second loan is in fact the better deal.

Frequently asked questions about the loan comparison calculator

Are the results accurate or are they estimates?

Since a loan comparison calculator works on assumptions regarding the length of the months and years (it assume all months are equal in length and that there are exactly 52 weeks and 26 fortnights in a year, which isn’t necessarily true) the results should be looked at as estimates instead of as accurate results. It will still give you an idea of which loan will provide you with a better deal even if the numbers aren’t exact.

Will I need any personal information to use the calculator?

You won’t need any personal details like your name, date of birth, or home address. All you’ll need is the loan information including the loan amount, the loan term and the introductory term if applicable, the introductory and ongoing rates, and the upfront and ongoing fees.

Why should I use the loan comparison calculator?

The loan comparison calculator is a way for borrowers, especially first-time buyers, to compare loans so they’ll be able to find the best overall deal. Sometimes loans can be confusing, especially when fees and introductory rates are thrown into the mix. It’s possible that the loan with the higher ongoing fees might actually be the better deal if the ongoing rate is lower than the other loan’s rate.

When you’re ready to enter into a new home loan but are stuck deciding between a few different options, you can try using the quick and simple loan comparison calculator and let it work out the numbers for you. Once you get the results you’ll be able to see which home loan gives you the best overall deal.

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