How this number is made
A one-point move in the rate is not a one-point move in the payment. This page prices the same loan at two rates so you can see the monthly gap and the gap over the full term. It is the arithmetic behind “what if I wait and the rate is higher,” and it ignores the chance that the price changes too.
- The loan amount should be identical in both cases.
- Points you would pay to get the lower rate are not subtracted. That is the points page.
Formula
Each payment is the standard mortgage payment. The gap is the difference. The term gap is the monthly gap × months.
Worked example
With the figures already in the form, monthly difference is $230.13.
Questions
Does this include taxes and insurance?
No. Those do not change with the interest rate.
Is the cheaper rate worth points?
Only if you keep the loan long enough to earn the points back. This page does not price points.