Compare Two Lenders

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How to use the Compare Two Lenders

1
Set the loan and timeline
Use the same loan amount for both offers, and your realistic timeline.
2
Enter Lender A's terms
Rate, points and all other fees from the first term sheet.
3
Enter Lender B's terms
The same three numbers from the second offer.
4
Test a longer timeline
Change the months to see when the answer flips. The note shows the break-even point.

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Worked example

On a $250,000 loan for six months:

Lender A: 10.5% with 3 points and $1,500 in fees costs about $22,100.
Lender B: 12% with 1 point and $1,000 in fees costs about $18,500.

Lender B is about $3,600 cheaper despite the higher rate, because the points cost less. The two offers would cost the same only if the loan stayed out for about 17.6 months.

The formula

Cost = Loan × Points % + Fees + Loan × Rate × Months ÷ 12
Break-even months = (Up-front cost B − Up-front cost A) ÷ (Loan × (Rate A − Rate B) ÷ 12)

Common mistakes

Comparing different loan amounts. If one lender funds more of the rehab, compare the cash you'll need too, with Cash to Close.
Ignoring speed and reliability. A cheaper lender that can't close on time can cost you the deal.

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