The purchase decision
Option B comes out $122,068 ahead after 10 years without refinancing. A: $1,150,000 at 5%. B: $950,000 at 7%.
PAY LESS FOR THE HOME. SEE WHAT CHANGES.
The Break-Even Point.
The rate went up. But the price went down. Is that a better deal?
A lower price means a smaller loan. That can make up for a higher rate. Check the price today. Test home values later. Explore a possible refinance.
Illustrative numbers—not a property valuation, loan quote or forecast.
YOUR NEXT CHAPTERA move you can feel good about.
01
Try two deals for the same home
- 1. Start herePut the original price and rate in A.
- 2. Play with the priceMake B’s price lower and its rate higher.
- 3. See the answerFind out which deal leaves you better off.
Tap to try: rate from 5% to 7%
A
Original price & rate
The deal you’re comparing against
Monthly loan payment$4,938.76/mo
Borrow $920,000 · Pay $230,000 upfront
B17.39% less
Your new deal
Change the price. See if it helps.
Monthly loan payment$5,056.30/mo
Borrow $760,000 · Pay $190,000 upfront
17.39%
20% higher50% lower
7%
0%25%
Loan setup: 20% paid upfront · 30 years to repay
We use the same down-payment percentage and loan length for both deals.
1 · YOUR PURCHASE, WITHOUT A REFINANCE
B looks like the better deal.
The lower price makes up for the higher rate.
Price of the home$200,000less to buy
Loan payment each month$117.54more to pay
Net benefit after 10 years$122,068lower net cost with B
What you pay. What you have. The net cost.
Compare both deals after 10 years, without refinancing. Lower net cost is better.
| How the numbers add up | Option A | Option B |
|---|---|---|
| Down payment | $230,000 | $190,000 |
| + Loan payments over 10 years | $592,651 | $606,756 |
| + Closing costs entered | $0 | $0 |
| + Other monthly costs over 10 years | $0 | $0 |
| 1. Total cash paid | $822,651 | $796,756 |
| Estimated home value | $950,000 | $950,000 |
| − Remaining loan balance | $748,347 | $652,174 |
| 2. Total equity in the home | $201,653 | $297,826 |
| 3. Estimated net cost Total cash paid − total equity | $620,998 | $498,930 |
Option B has an estimated net cost $122,068 lower. That difference is the overall benefit shown above.
Total cash paid includes your down payment once—not the full purchase price plus loan payments. Equity is the value left after paying off the remaining loan; it is not cash in your bank. Net cost is a comparison measure, not a tax calculation or guaranteed sale profit. Selling costs, maintenance, tax benefits and investment returns are excluded. Taxes and insurance count only if entered. Figures are rounded.
Our guess about the future: you could sell the home for the same amount with either deal. Try other values below. This purchase comparison assumes no refinance. Results are estimates. Monthly loan payments exclude taxes and insurance; extra costs count only if entered.
Is this a safe bet?
Let’s test the numbers. Compare your down payment with the equity you may have after five years, then check the difference in payments.
Try a home-value change over five years:
Current example: 0% total value change over five years. Starting value: $950,000, automatically taken from Option B, the winner at the selected 10-year comparison.
| What to compare | Option A | Option B |
|---|---|---|
| Your down payment (no closing costs) | $230,000 | $190,000 |
| Estimated home value at year 5 | $950,000 | $950,000 |
| Loan still owed at year 5 | $844,824 | $715,400 |
| Estimated equity at year 5 | $105,176 | $234,600 |
| Equity above / below your down payment | -$124,824 | $44,600 |
| Monthly loan payment | $4,939 | $5,056 |
| Total loan payments over 60 months | $296,326 | $303,378 |
| Total cash paid (down payment + loan payments) | $526,326 | $493,378 |
| Estimated net cost (cash paid − equity) | $421,150 | $258,778 |
B’s down payment compared with A$40,000less cash upfront · excludes closing costs
B’s payments over five years$7,052more paid across 60 payments
B’s equity compared with A at year 5$129,424more equity · not cash in your bank
$162,372 better off with B in this five-year check. For each option: down payment + 60 loan payments − total equity = estimated net cost. The option with the lower net cost leads by this amount. This check excludes closing costs and all other monthly costs, so it may differ from section 1 when you add those costs.
At least one option ends with less equity than the original down payment. That alone does not make the purchase safe or profitable. Payments must fit your budget; a sale has costs and home values can fall. No refinance is assumed here.
What if I refinance later—or rates go up?
Start with Option B’s locked rate of 7.00%. Slide left to try a lower refinance rate. Slide right to see the cost of a higher-rate replacement loan.
7.00%
Lower rate
Possible refinance savingsHigher rate
Potential extra cost
Possible refinance savingsHigher rate
Potential extra cost
B’s unchanged loan payment$5,056/moSame payment; no new fees
Extra cost from market rate changes$0$0 while you keep this fixed-rate loan
Overall change at year 10$0No change from keeping B’s loan
Payments include principal and interest only. Overall change = cash paid difference after fees + equity difference from the remaining loan balance, measured from purchase.
Keep your current fixed-rate loan.
No refinance, no new fees, and no change to your loan payment.
This section always uses Option B’s purchase price ($950,000) and rate (7.00%), even when A wins above. It does not change the purchase comparison.
Rate scenario details Keep B’s loan unchanged
An example, not a promise. Future rates and refinance eligibility are unknown. A might also refinance. Keep the purchase affordable without relying on a future refinance.
Option B leads by $122,068.
Your 10-year purchase comparison, five-year equity check, and rate scenario—all in one place.
Total paid, total equity, net cost
After 10 years: A pays $822,651 in total cash and has $201,653 in equity, for an estimated net cost of $620,998. B pays $796,756 and has $297,826 in equity, for a net cost of $498,930. Total cash paid minus total equity equals net cost. Option B has a net cost $122,068 lower. Equity is estimated value minus the remaining loan, not cash savings. Net cost excludes selling costs and is not guaranteed profit.
Your monthly payment
A: $4,938.76. B: $5,056.30. B costs $117.54 more per month in principal and interest. Both use 20% down and 30-year fixed loans.
The five-year check
Down payments: A $230,000, B $190,000. Estimated equity at year 5: A $105,176, B $234,600. B requires $7,052 more in mortgage payments over 60 months. $162,372 better off with B combining down-payment, payment and equity differences. Closing costs and other monthly costs are excluded; no refinance.
Your market assumption
0% annual value change (0% over five years). Both deals use the same starting value of $950,000, drawn from the winning purchase price. Equity equals estimated value minus the remaining loan. Positive equity is not a guarantee of a safe purchase or cash profit.
If rates change
Keep B at 7%: $5,056.30 per month, no new fees. Rising market rates do not raise this fixed-rate payment.
What these results leave out
The main purchase result includes closing costs (A $0, B $0) and other monthly costs (A $0, B $0) only as entered. Selling costs, maintenance, tax benefits and investment returns are excluded. Future values and rates are assumptions, not forecasts or offers. Historical context does not guarantee future performance. Results are rounded.
You’ve seen the numbers. Let’s put them to work.
Review your findings with Enrique Pelayo Jr to explore purchase terms, compare available loan options, and plan your next move. We’ll introduce you by email with your findings PDF attached.
History provides context. Your future scenarios are hypothetical. These findings use the assumptions shown, not an appraisal, loan quote or prediction.
Historical context & sources
Freddie Mac’s PMMS tracks national mortgage rates back to 1971. Its September 17, 2026 release reported 6.95% for a 30-year fixed mortgage, versus 6.26% a year earlier. The starting 5% and 7% rates are illustrative inputs chosen for this comparison, not rates from that historical release or available quotes. Freddie Mac PMMS →
FHFA tracks historical single-family home-price changes back to the mid-1970s. This provides context for testing changes, but our down 10%, flat and up 10% buttons are chosen stress scenarios—not FHFA projections or calculated historical averages. FHFA home-price history →
Sources reviewed September 18, 2026. Calculations use the inputs shown, standard loan amortization and the stated assumptions. No live pricing or automatic property valuation is used.
Show me whySee the money saved, home value and full math.
Your new deal’s monthly cost
$117.54 morePrincipal & interest onlyCash needed upfront
$40,000 lessDown payment + entered closing costsWHAT PRICE WOULD MAKE THE PAYMENTS EQUAL?
Starting offer$1,150,000at 5%
Same payment
Break-even offer$927,916at 7%
At 7%, a price of $927,916 matches A’s mortgage payment.
19.31% below A’s price for the same principal & interest payment, using the same down-payment percentage and term.
Why one deal leaves you better off
What will the home be worth?
For the same home at a negotiated price, compare the same future value. If the lower price reflects a lower-value home or market, try the separate-growth option.
Both deals use the winning option’s purchase price as their common starting value. This compares the same home; no price recovery is assumed.
Automatic starting value: $950,000 from Option B.
1 year30 years
Years shown are time held, not a change to your loan term. Growth is an assumption, not a forecast.
OPTION B COMPARED WITH A · AFTER 10 YEARSAhead on these assumptions
$122,068estimated overall benefit
$25,895Less total cash paid with B (negative = more)
+$96,173More equity with B (negative = less)
B’s net position relative to A at each exit year. Above $0 favors B. Each point uses the selected resale model.
Each amount is the total at that year—not an additional yearly saving. Select a year to match the main result above.
Total cash paid includes down payment, loan payments and any costs entered. Equity is estimated home value minus the unpaid loan. No investment return is assumed. This is a nominal-dollar comparison, not a present-value calculation.
YOUR 10-YEAR FINANCIAL BREAK-EVEN
At $1,030,035, B’s cash and equity position approximately matches A under these assumptions.
Add closing costs & other monthly costsOptional · currently excluded
Monthly costs may include property tax, insurance, HOA and mortgage insurance. They stay constant for the entire comparison. Enter actual nonrefundable closing costs, net of credits; exclude your down payment and refundable escrow deposits.
03
After 10 yearsEvery number, side by side
| What you’re comparing | A Starting point | B Alternative |
|---|---|---|
| Purchase price | $1,150,000 | $950,000 |
| Monthly principal & interest | $4,939 | $5,056 |
| Other monthly costs entered | $0 | $0 |
| Down payment | $230,000 | $190,000 |
| Closing costs entered | $0 | $0 |
| Principal paid off | $171,653 | $107,826 |
| Interest paid | $420,998 | $498,930 |
| Remaining mortgage | $748,347 | $652,174 |
| Assumed home value | $950,000 | $950,000 |
| Estimated equity | $201,653 | $297,826 |
| Total cash paid¹ | $822,651 | $796,756 |
| Estimated net cost (cash paid − equity) | $620,998 | $498,930 |
¹ Down payment + mortgage payments + entered closing and other monthly costs. Equity = assumed home value − remaining mortgage.
Make your next move an informed one.
Send this exact comparison to your buyer, realtor or loan officer.
How this calculator works
Both loans use standard monthly amortization and the same down-payment percentage. Interest rates are note rates, not APR. Payments use unrounded values internally, so lender rounding may differ slightly. No refinance or extra payments are assumed. At 0% interest, principal is divided equally across the term.
Scenario B’s net advantage = (total cash paid for A − total cash paid for B) + (equity in B − equity in A). Down payments are included once in cash paid. Principal repayment appears in cash paid and equity, so it is not treated as a pure expense. Payment break-even matches principal and interest only; financial break-even also uses entered costs and the selected future-value model.
In the same-value model, both resale values equal the shared starting market value × (1 + annual value change) raised to the holding period. In the separate-value model, each purchase price grows at that rate. Choosing the same value assumes equal resale values; it does not prove an immediate bargain or future recovery.
Taxes, insurance, HOA and mortgage insurance are excluded unless entered as other monthly costs. Mortgage insurance is not calculated automatically; it may be required with less than 20% down. Selling costs, maintenance, rent or other costs of waiting, tax benefits and returns on retained cash are excluded. All comparisons begin at purchase and assume equal holding periods. This tool does not model buying now versus waiting on a shared calendar.
Illustration only. Current comparison: Option A $1,150,000 at 5%; Option B $950,000 at 7%. The future-rate slider shows 7% against B’s locked 7% rate. These inputs demonstrate the comparison; these are not live rates, a loan quote or a prediction. Change every assumption to fit the property and financing. Actual loan terms, costs and future values will vary.