Compare a 'no-cost' vs. traditional mortgage

Many lenders will offer a 'no-cost' loan in lieu of a traditional mortgage. 'No-cost' loans are generally priced at a higher interest rate than a traditional mortgage. The higher rate allows the lender to make enough money on the interest rate spread from the underwriter to pay for all your closing costs and provide them with their profit. Use this calculator to help determine if a no-cost loan with your lender is better than a traditional mortgage.

Assumptions

Amount of loan ($)

Number of years (1 to 40)

Mortgage Rates

	No-Cost Loan (0% to 40%)	Traditional Mortgage (0% to 40%)
Annual interest rate

Traditional Loan Closing Costs

Discount points (% of loan) (0% to 5%)

Origination fees (% of loan) (0% to 5%)

Lender fees (processing and underwriting) ($)

Credit report ($)

Appraisal ($)

Title insurance ($)

Reconveyance fee ($)

Recording fee ($)

Wire and courier fee ($)

Endorsement fee ($)

Title closing fee ($)

Document preparation ($)

Other fees ($)

How do you plan to pay closing costs?

Comparison Assumptions

Comparison options/cost of money help

(0% to 40%)

Marginal tax bracket (0% to 75%) help

Years to compare total costs: (1 to 40)