Mortgage Comparison

About this comparison tool

A mortgage comparison tool puts three or more loan scenarios side by side so you can see — at a glance — which combination of price, down payment, rate, and amortization actually saves you money over the life of the loan. It is the answer to questions like "Is 25 years at 5.5% better than 30 years at 5.25%?" and "How much does an extra 5% down payment really save me?"

The comparison covers payment, total interest paid, mortgage insurance (CMHC or PMI where applicable), and the equity curve — how quickly each scenario builds ownership in the home. Two mortgages that look similar at the monthly-payment level can differ by tens of thousands of dollars in lifetime cost, and the equity-curve graph makes that visible the way a table cannot.

The math: comparing payments and total interest

Each scenario uses the standard mortgage formula: payment = P × r × (1+r)^n ÷ ((1+r)^n − 1), with the country-appropriate compounding (semi-annual for Canada, monthly for the US). Total interest = (payment × number_of_payments) − principal.

For a head-to-head, the meaningful comparison metrics are: monthly payment (cash flow), total interest paid (lifetime cost), and the equity curve (how the unpaid balance falls over time). A shorter amortization at the same rate gives a higher monthly payment but dramatically less total interest. A lower rate gives a lower monthly payment AND less total interest — almost always the better choice if you qualify for it.

Worked example. $500,000 at 5.5% over 25 years (Canada): payment ≈ $3,051, total interest ≈ $415,300. Same amount at 5.5% over 30 years: payment ≈ $2,816, total interest ≈ $513,800. The 30-year saves $235/month but costs $98,500 more over the loan. Conversely, $500,000 at 5.0% over 25 years: payment ≈ $2,908, total interest ≈ $372,400 — a 0.5% rate cut saves $143/month and $42,900 lifetime, more than enough to justify shopping rates aggressively.

When to refinance and how to read the equity curve

Look at total interest, not just payment. A lower monthly payment from a longer amortization is genuinely useful if cash flow is tight — but the tradeoff is tens of thousands of dollars over time. A rough guideline: every extra year of amortization at 5–6% rates adds about 6–8% to total interest. Going from 25 to 30 years can add $80,000–$100,000 on a $500,000 mortgage.

Read the equity curve. The curve shows how quickly each scenario builds equity (how fast the unpaid balance drops). In the first few years, almost every dollar of every payment goes to interest, not principal. Equity builds slowly at the start and accelerates near the end. The 25-year scenario crosses 50% equity much earlier than the 30-year — important if you might sell in 10 years.

When does refinancing make sense? In the US: when the new rate is at least 1% below your current rate, AND you plan to stay in the home long enough to break even on the refinance costs (typically 2–4 years). In Canada: refinancing mid-term triggers prepayment penalties — usually 3 months' interest for variable, or the higher of 3 months' interest and the interest rate differential (IRD) for fixed. The IRD can be punishing in a falling-rate environment — check the math before breaking a fixed mortgage.

Down payment trade-off (Canada). At 20% down you avoid CMHC insurance entirely. At 5% down, CMHC adds 4% of the loan to the principal, which then accrues interest for the full amortization. On a $500,000 home, going from 5% to 20% down avoids about $19,000 in CMHC premium and saves a bit more in interest on that premium over 25 years.