An easy program to compare installments and uncover the “actual rates” of the mortgages supplied on the market
The program at the bottom of this page calculates the periodic installment and the “effective rate” applied to a specific mortgage; it also allows you to compare different loans to identify the most cost-effective one.
The final result of the elaboration is thus the most convenient mortgage, the one with the lower “actual rate”, which represents the real cost of the loan, because it considers both initial expenses and the periodical compounding of interests.
The information needed are few and easy to find:
a) the amount of the loan/mortgage;
b) the name of the bank;
c) the expected repayment period (in years);
d) the number of installments in a year (12, 6, 4, …);
e) the annual nominal rate, hence the rate publicized for that mortgage;
f) the initial expenses.
The program’s output consists of key information about the loans analyzed and, above all, an indication of the most cost-effective mortgage.
Here is the program. Have fun!
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Comparing Installment Loans
Compare several loan or mortgage offers, and find out which is most convenient for the borrower using the actual rate criterion — which also accounts for initial expenses, not just the nominal rate.
ℹ️ The actual rate is calculated by solving the amortization schedule equation on the capital actually received (loan amount minus initial expenses), for the same installment paid: it is a more precise indicator than the nominal rate alone, conceptually close to the APR.
Summary and comparison
This tool is for informational purposes only and does not replace checking the contract with the bank or a financial advisor.
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