How to compare mortgage offers side by side
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By Editorial team
A $475,000 US purchase with 20% down leaves a $380,000 conventional loan. Pricing two realistic retail quotes, 6.25% on a 15-year versus 6.75% on a 30-year, produces a $793/month P&I gap while the shorter loan cuts lifetime interest by about $300,805. This is for buyers who have received quotes from two lenders and want a fair side-by-side on total cost, not just the monthly payment.
The scenario modeled
Both tabs assume the same May 2026 start, monthly payments, no MI because of the 20% down payment, and no taxes or insurance so you can read off pure amortization differences.
| Input | Offer A | Offer B |
|---|---|---|
| Loan amount | $380,000 | $380,000 |
| Program | Conventional fixed | Conventional fixed |
| Rate | 6.25% | 6.75% |
| Term | 15 years | 30 years |
The findings
The 15-year amortization pushes principal down quickly, so scheduled interest over the life of the loan falls to about $206,477. Stretching to 30 years at the higher rate lifts lifetime interest to about $507,282. The trade-off is stark: $793 more per month on the 15-year, but $300,805 less in total interest. Whether the cash flow hit is worth the long-run saving depends on income stability and other financial priorities.
| 15-year | 30-year | Difference | |
|---|---|---|---|
| Monthly P&I (month 1) | $3,258 | $2,465 | $793/month more on 15-year |
| Total interest | $206,477 | $507,282 | $300,805 less on 15-year |
| Loan length | 180 months | 360 months | Half the timeline |
US context
The 2024 National Association of Realtors Profile of Home Buyers and Sellers reports that most resale buyers finance with long amortizations for payment relief, while move-up households sometimes choose 15-year products when equity and income can carry the faster paydown. Your own budget and job stability matter more than any headline national average.
Source: National Association of Realtors, "2024 Profile of Home Buyers and Sellers," published November 2024, accessed April 2026. URL: https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers
When this framework applies, and when it does not
Use it when two quotes share the same loan amount and you need a cleaner story on payment versus interest than the headline rate comparison gives you.
It does not apply cleanly when:
- One quote includes lender credits, discount points, or a temporary buydown. Those change the effective APR and upfront cash. Strip them out first and compare only rate and term before running the side-by-side.
- Your horizon is short (under 5 years). The 15-year quote's lifetime-interest advantage almost entirely accrues after year 5. If you're likely to sell or refinance before then, the two options are much closer than the lifetime-interest number suggests.
- Either quote requires mortgage insurance. PMI or MIP materially changes the monthly payment and the lifetime cost, and the two quotes may have different MI duration (PMI cancels at 78% LTV; FHA MIP does not on most low-down-payment loans). Add MI to both tabs before comparing, or see our FHA vs conventional article for the full picture.
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Frequently asked questions
- What should I compare when shopping two mortgage offers?
- Align loan amount, closing costs assumptions, MI rules, and how long you will keep the loan. Then compare monthly P and I, total interest, payoff date, and any MI that cancels on conventional loans.
- Why does a 15-year loan save so much interest versus a 30-year loan?
- A shorter amortization pays principal faster, so less interest accrues on a shrinking balance. In our modeled pair, the 15-year option cut total interest by about $301,000 versus the 30-year path.
- Is a lower monthly payment always better?
- No. A lower payment often comes with more lifetime interest or slower equity build. If cash flow is tight, the 30-year payment can be the right tool, but you should see the long-run cost trade-off in numbers.
- Can I compare fixed and adjustable loans the same way?
- Yes, if you export the same balance and document ARM caps, index, margin, and how you expect rates to move. Our other US guides walk through ARM mechanics so the comparison stays fair.