Future Value Calculator (9ci)

Comparing Two Fixed-Rate Mortgages

Who This Calculator is For: Borrowers trying to decide which of two fixed-rate mortgages
they should select based on the lowest total cost over a specified future period.

What This Calculator Does: This calculator compares the total cost of two
fixed-rate purchase mortgages over a specified future period. It allows upfront costs
to be financed,and an optional interest-only period at the beginning.


Information About You and Your House
   Is This Loan for the Purchase of a Property or a Refinance?
  Expected Years in House, Cannot Exceed Term
  Rate of Interest on Savings  (e.g. 3.5)
  Income Tax Bracket ( e.g. 27 )
  Current Value of House (e.g. 225000)
  Optional:  Expected Rate of Property Value Appreciation
Loan Information Loan 1 Loan 2
  Loan Amount  
  Interest Rate on Loan  (e.g. 7.50)
  Term ( in months )
  Optional: Number of Years Loan is Interest-Only
  Points  (% of Loan) — Check box if charges will be added to loan
  All Other Fees Paid to Lender ( $ )  — Check box if charges will be added to loan
Mortgage Insurance Information   (if applicable) Loan # 1 Loan # 2
  Type of Loan
  Upfront Mortgage Insurance Premium  ( $ ) — Check box if charges will be added to loan 
  Monthly Mortgage Insurance Payment  ( $ )
  Will Mortgage Insurance be Deductible for You? Yes      No  


This is your marginal tax rate, the rate at which each additional dollar of income will be taxed. If you pay only Federal income taxes, it is the highest tax bracket you used when you calculated your taxes. Federal tax brackets currently are: 10%, 15%, 25%, 28%, 33%, and 35%. If you also pay state and/or local income taxes, these marginal rates can be added to the Federal rate. For example, if you had to pay 25% to the IRS and 5% to the state of Pennsylvania, your tax bracket is 30%. To perform a "pre-tax" analysis enter zero (0) as the tax rate. The period may be stated in fractions. For example, 25 years and 1 month would be entered as 25.083, 25 years and two months would be 25.167, and 25 years and 3 months would be 25.25, etc. This includes all settlement costs other than points. Any origination fees expressed as a percent of the loan amount should be included in Points. Do not include escrow reserves for taxes and insurance, or prepaid (per diem) interest. Mortgage Insurance is currently tax deductible if your income is $100,000 or less for a couple, $50,000 or less for a single person. This is the interest rate you could earn on the monies you spend during the period you are in your home. For most people, it would be the interest rate on a bank account or a money market fund. In after-tax cost comparisons, this figure is adjusted to an after-tax basis. The size of the mortgage insurance monthly premium is triggered by the down payment percentage. Mortgage insurance premiums drop significantly as the down payment crosses the 3%, 5%, 10%, 15% and 20% levels. When deciding on your down payment be sure to take this into account. Must be entered as a dollar amount. Can be entered as a positive or negative amount. If negative, any amount in excess of All Other Fees Paid to Lender will be retained by the loan provider. This is required only if your are now paying mortgage insurance. If you are paying mortgage insurance, we need to know the value of your house when the current loan was taken out so that we can figure out when the insurance payment will stop. We assume it stops when the balance reaches 80% of original value. Enter as a dollars and cents amount. Conventional and FHA mortgage insurance terminates automatically when the loan balance reaches 78% of original property value. Conventional mortgage insurance premiums drop to .20% after 10 years. FHA mortgage insurance does not drop after 10 years. If you enter a value, mortgage insurance will be terminated when the loan balance equals 80% of the appreciated value of the property after year 5, or 75% during years 2 to 5. This affects the after-tax interest cost because on a purchase transaction points are fully deductible in the first year whereas on a refinance the deduction must be spread over the life of the loan, with the remaining portion of the deduction taken in the year the loan is paid in full.